Fraud now on industrial scale, says new report

Forty percent of UK businesses have reporting fraud attempts in the last 12 months.

Posted 21 June 2023 by Christine Horton

Fraud in the UK is “rapidly becoming industrialised”, with 40 percent of UK businesses reporting known or suspected fraud attempts in the last 12 months.

The figures come from research by digital identity firm GBG, which says globally almost half (49 percent) of the businesses that reported fraud attempts say it has increased in the last year. 

At the same time, more than two thirds (63 percent) of smartphone owners are worried that their personal information (such as name, and/or bank account number) is available for sale to criminals on the internet. almost nine in 10 smartphone owners (88 percent) are concerned that they may become a victim of fraud in the future.

More than half (53 percent) agree they are more concerned about being a victim due to the cost-of-living crisis.

Of those who had been victims of fraud, less than half (47 percent) reported the fraud, with more than a quarter (26 percent) actually closing their account. Twenty-three percent demanded compensation and only three percent of victims didn’t take action following their fraud experience. 

More than eight in 10 (82 percent) respondents agree it is the responsibility of the business they transact with to protect their personal information but over half (54 percent) of people think that signing up for new accounts on their smartphones is only ‘somewhat secure’ with 11 percent believing it isn’t secure at all.

High trust in biometrics

More than nine in 10 (95 percent) of those surveyed believe the use of biometrics (fingerprints, facial recognition, or voice recognition) is the most secure method of improving the security of online accounts. Despite this, only 28 percent of UK businesses currently use biometric checks compared to 58 percent of their US counterparts. 

Gus Tomlinson, chief product officer identity and fraud at GBG, said: “The UK is witnessing a rapid industrialisation of fraud and far too many individuals and businesses are having to deal with the absolutely devastating impact of unscrupulous fraudsters exploiting any vulnerability they find. 

“As a result, we are seeing that there is a growing level of comfort in biometrics because this is now highly visible technology. People can already see biometrics working all around them as part of the fight against the rising levels of scams and fraud. Biometric technology cannot defeat fraudsters on its own – it needs to be layered with other visible and non-visible fraud defences – but what we are able to achieve with biometric technology in the mix is hugely reassuring.”

Synthetic fraud the biggest risk for businesses

According to almost a quarter (24 percent) of UK businesses, synthetic fraud is considered to pose the biggest fraud risk to their business over the next three years. Synthetic fraud is a fast-growing fraud in which a fraudster combines real (usually stolen) identity information with fake information to create a new identity to illicitly obtain goods and services by posing as genuine customers. 

“Increasingly customers are looking for evidence that their identities are protected and that measures are being taken to prevent fraud,” said Tomlinson. “Greater numbers of customers are favouring security over speed when they open new accounts and there is much that businesses can do to build trust and make use of identity verification to protect themselves and their business – even using it as a competitive advantage.”