Rising Online Crime Propels Reported Fraud to Soaring Heights in the UK

Rising Online Crime Propels Reported Fraud to Soaring Heights in the UK

19 Feb    Finance News, News

The spectre of fraud looms larger than ever in the UK, with reported cases surging to a staggering £2.3 billion in the past year, a figure more than double that of 2022 and the second-highest annual total recorded by BDO in two decades.

The latest findings from BDO’s FraudTrack report reveal a 60% uptick in high-value cases exceeding £50 million in 2023, alongside an overall 18% increase in reported fraud incidents, marking a three-year pinnacle. However, experts caution that these figures likely represent only a fraction of the true scale of fraudulent activities, as many organisations opt not to disclose such incidents. Shockingly, the Crime Survey for England and Wales indicates that fewer than one in seven fraud offenses are reported to law enforcement authorities.

The surge in reported fraud is underpinned by a myriad of factors, notably the exponential rise in online scams, phishing attacks, and system breaches. Of particular concern is the proliferation of authorized push payment transactions, a tactic wherein fraudsters dupe unsuspecting individuals into transferring funds to them.

BDO highlights a troubling trend: the emergence of online fraud factories or cyberfraud centers, allegedly exploiting hundreds of thousands of individuals coerced into working for criminal syndicates. The United Nations has estimated that these nefarious operations generate billions of dollars in illicit revenue.

Forensic accounting partner at BDO, Kaley Crossthwaite, underscores the gravity of the situation, stating, “The surge in reported fraud numbers mirrors the influx of fraud cases our forensic investigations teams encounter daily. Yet, many opt not to report fraud incidents due to feelings of shame or embarrassment, while businesses remain reticent, fearing negative publicity and reputational damage.”

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Despite hopes that governmental initiatives such as the Online Fraud Charter might curtail online fraud, Crossthwaite warns that fraudsters are adept at exploiting advancements in technology, including artificial intelligence (AI), to stay ahead of the curve.

In light of these developments, urgent action is imperative for businesses to fortify their defenses against fraud and financial crime, as no sector is immune to the ever-evolving threat landscape.

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