The Fight Against Fraud in the UK

Britain has hit a record on fraud cases, with losses reaching almost three billion pounds a year. This is evidenced by the investigation of the Daily Mail. Unfortunately, the complexity of fraudulent activities has increased to alarming levels compared to previous years.

The number of fraud cases has grown to record highs during the pandemic. As a rule, scammers react quickly to any changes in the market and media. They can use panic moods, lack of awareness, and the usual worries and fears of people and make money from it. During the lockdown period, new reasons emerged for non-cash payments. 

The increase in the number of frauds was also facilitated by the closing of most retail outlets, while stores were developing their e-commerce sectors. Customers reacted more positively than usual to the offers of goods and services on online platforms, which the fraudsters also took advantage of.

Cross-border fraud is another major concern for UK law enforcement agencies, especially considering that most of the mass fraud campaigns take place outside the UK. Even if law enforcement agencies can unravel the digital network to identify organised criminal groups, it is unlikely that they will bring them to justice in Britain.

Typically, cases in the courts serve as an indicator of fraudulent activity in the UK, although research from KPMG is confident that these cases do not show the full picture in the context of crimes reported in Action Fraud. In 2020-2021, 875,622 fraud reports were filed with reported losses of £2.35 billion. The report shows that in today's harsh reality, relatively few cases are brought to court.

In the UK, several structural problems have to be faced in the sense that the introduction of anti-fraud laws, such as the Bribery Act and the Economic Crime Act, or increasing the responsibility of accountants for detecting fraud during an audit - all are great, but they will not lead to a great result due to weaknesses in the systems of law enforcement, supervision, and management.

Evolving Scams

According to an official crime survey, the rise in advance fee fraud and consumer and retail fraud indicates that fraudsters are taking advantage of the behavioural changes caused by the pandemic. Crimes related to advance fee fraud included criminal activities where victims transferred funds to fraudsters for postal deliveries. The biggest increase was noted in crimes related to unauthorised access to personal information, including hacking. Crime research shows that personal data breaches included compromising victims' data as a result of large-scale data leaks, as well as compromising victims' email or social media accounts.

What’s more, an evolving method of fraud called phishing has become one of the main ones used to commit fraud in the UK. For example, about half (53%) of CREW respondents reported that only in the last month did they receive a message on social networks or an email that was or could have been phishing.

The Online Safety Bill

The draft Online Safety Bill was introduced in the House of Commons during the sessions 2021-22 and 2022-23. A bill providing for and in connection with OFCOM regulation of certain internet services. 

Previous plans to create a regulatory framework for online security that did not include financial conditions have been subjected to multiple criticisms. Unlike them, the new draft bill included fraud, which is created by users. Oliver Dowden, then Secretary of State for Digital Technologies, Culture, Media and Sport, in a written statement on the publication of the bill explained that the scope of the bill was expanded. Such actions on the part of the authorities are aimed at including the financial damage caused by fraud on the internet.

Fighting Fraud in Business

Any fraud means a leak of assets, and it leads to a decrease in the business’ efficiency. Remember that the fight against fraud should primarily be organised and well thought out. You can win it only by understanding the reasons that push people to commit illegal actions. Preventive measures against corporate fraud are also important because it is pointless to deal with a situation when everything has already been stolen. 

A well-designed fraud prevention plan applicable to a specific business or organisation can reduce the risk of falling victim to fraud significantly. Meanwhile, even if a business or organisation becomes a victim, it will have many more opportunities to detect fraud in advance and reduce the losses. A fraud prevention plan requires businesses to conduct a targeted risk assessment and then implement policies detailing prevention, detection, and response plans.

Fraud is a constant risk, and the fight against fraud is only a small part of the company's large internal control system. Heads of the companies are required to ensure that they have considered and attempted to deal with both external and internal fraud threats to their business. At this stage, corporate rules and procedures, and the local regulatory documents that the company’s director creates to prevent fraud, are necessary. An important step is to develop the policies, such as a code of conduct or anti-fraud policy, and to mandate their communication of them to company employees.

However, organisations need to regularly check how effectively internal and external attack prevention measures are working. First of all, it is necessary to establish that fraud is unacceptable in any form within the company itself. Chief managers should take active steps, for example, to train employees so that they can recognize and understand threats to the organisation and ways to communicate possible problems to higher-ups. Ideally, the policy should be reviewed annually to assess the need for changes.

Despite the high risks of fraud, especially in times of crisis, security measures are also evolving and changing following the needs. For business, security within the company and for customers are the most important components of success. With modern advanced technologies, it is possible to ensure the protection of organisations at a high level. Let's look at an example of the introduction of security measures by Payrow.

Financial Security with Payrow

To ensure the security of transactions, Payrow has implemented a new 3d secure v.2 protocol. The protocol provides customers with fast, simple, and convenient authentication and data transmission over a highly secure channel. Thanks to 3d secure v.2 we have simplified and accelerated the transaction process. To be specific, in case the client uses the same date to confirm the transaction, codes, and geolocation, authentication becomes easier and faster.

Read more about 3D Secure v.2 Business Safety Protocol.

Moreover, we have made the payment process adaptive for mobile apps and browsers. Now users can easily go through the authentication process directly in the application. There is no need to input data manually to approve a transaction since the system automatically fills in the required field by reading the code received via SMS. Payrow has also included additional authentication options, such as security tokens and biometric data. We believe such protection measures will help to avoid a significant number of attacks and increase the credibility of your company thanks to secure transactions.

Make your payments secure with Payrow!