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Financial fraud costing the UK millions a day

Financial fraud costing the UK millions a day

Official figures released by Financial Fraud Action UK (FFA UK) stated that in 2016, the UK lost £2 million each day as a result of financial fraud. The amassed amount lost to financial fraud was a staggering £768.8 million, an increase on the £755 million lost in 2015.

These figures were published in light of the Take Five campaign, which will involve all the major banks and include key financial services providers across the UK. They will unite together for a national day of action, raising awareness on how everyone can best protect themselves from financial fraud. The Take Five Day will see activity taking place around the UK, with staff in more than 6,800 branches available to give advice to customers on the simple steps they can take to protect themselves against financial fraudsters. Information can be given directly or through other avenues and customers are encouraged to take the time to talk to five others about the simple steps.

Katy Worobec, Director of FFA UK, said: “Tackling financial fraud is a priority for our members and a great deal of progress continues to be made. However, as today’s figures highlight, this remains a significant problem with fraudsters using increasingly sophisticated methods to circumvent bank technology and target victims. While the payments industry stops 6 in every 10 pounds of attempted fraud, it cannot solve the problem alone. Collective action is needed with banks, police and customers all playing their part. I hope today, on Take Five Day, customers will take the opportunity to find out how they can help better protect themselves and their loved ones from falling victim to financial fraudsters.”

In light of the figures released by the FFA UK, leading experts from LexisNexis® and NuData Security have had their say regarding the concerning issue of financial fraud:

Steve Arnison, Commercial Director at LexisNexis® Risk Solutions, said:

“With a flurry of High Street bank branch closures and the arrival of mobile-only challenger banks, the use of the internet to conduct banking activities is on the rise in the UK, but unfortunately so are the correlating fraud levels.

“Technology-savvy millennials demand accessibility when banking and have contributed to the sharp rise in the online and mobile use we commonly see today, but this preference has been compromised by their growing security concerns.  A recent survey by LexisNexis® Risk Solutions found that over half (54%) of millennials in the UK are concerned about having their identity stolen through online or mobile app-based activities.

“Worryingly, in another survey by LexisNexis Risk Solutions, 83% of ecommerce businesses admitted that they need to conduct more comprehensive identity management to mitigate fraud. With this in mind, banks must prevent online fraud by using identity verification and multi-factor authentication to determine not only whether a customer is who they say they are, but also to establish whether an individual owns the identity. In order to be more efficient, they need to take a risk-based approach with step-up authentication. Going forward, this type of process will play a vital role in maintaining the security of the UK’s online and mobile banking customers.”

Lisa Baergen, Director at NuData Security.

“These enormous fraud losses are astounding, and their magnitude can’t help but have a dampening effect on the UK economy. It’s also bad news for consumers, who often bear the brunt of the costs of fraud, especially in account takeover and new account fraud cases. It’s no wonder that consumers are pushing back on institutions and companies to improve security, holding them accountable, yet still wanting to have a good experience going through the gates.

“Financial fraud offers a lucrative source of income for cybercriminals, with 3.6 million fraud incidents last year. With such a tempting promise of high reward and low prosecution rates, emboldened cybercriminals have grown in their sophistication, exploiting the human-interest factor by posing as banks or suppliers and then duping consumers into revealing their personal details. “These scams have also proved effective in targeting commercial organisations, as senior executives have been tricked into revealing sensitive information enabling the hacker’s access to a company network.

“The increasing volume of attacks globally has also been attributed to more fraudsters willing to commit the crime, more data available on the black market, and more financial institutions and merchants vulnerable to attacks. Plus, as more countries fully adopt EMV, fraudsters have switched their focus to online environments, and as a result, fraud continues its migratory path to all available online channels.

“To detect out-of-character and potentially fraudulent transactions, before they can create a financial nightmare for consumers, we must adopt new authentication methods that can’t be deceived. Solutions that draw from consumer behaviour and interactional signals are leading the way to provide more safety for consumers without friction, and less fraud in the marketplace.

“To combat these types of attacks, consumers should always report dubious emails to their banking providers. No legitimate organisation will ask for security or banking details, so consumers need to be suspicious of any emails that request this information.

“Meanwhile, there are steps that consumers can take to help secure themselves:

  • Shop with well-known companies online, or use safer payment systems such as PayPal, Apple Pay, or Android Pay, to avoid providing your payment details directly to an unknown merchant.
  • Use a strong, unique password at every site and make sure to change your passwords regularly.
  • Don’t use public computers or free, unencrypted Wi-Fi to conduct financial or retail transactions or interactions.
  • Don’t fall victim to email and phone scams, where a consumer receives a call from “their bank” asking for personal, or financial account information. If it looks too good to be true, it most likely is. When in doubt, call the bank directly, using the number printed on the back of your card, or in a recent statement.

If you suspect you have been a victim of fraud in the UK, report the crime to  http://www.actionfraud.police.uk/ 

About Dean Alvarez

Dean is Features Editor at IT Security Guru. Aside from cyber security and all things tech, Dean's interests include wine tasting, roller blading and playing the oboe in his Christian rock band, Noughts & Crosses.

You can reach Dean via email - dean@itsecurityguru.org