After a year where Brits were on track to lose over £1bn to scammers, the consumer protection tide may be finally turning, according to an experienced fraud prevention expert.
Throughout 2023, scams involving holiday bookings, online romance, courier deliveries, fake online retailers, and even HMRC tax returns have dogged UK households.
The latest figures from UK Finance found scam victims lost £580m in just the first six months of 2023, while data from the Crime Survey for England and Wales shows it hits society to the tune of £6.8bn.
To ‘transform the fight against’ scammers, the Government launched a national campaign this week titled ‘Stop! Think Fraud’ and enlisted over 30 tech giants to clamp down on the illegal activity.
As part of the campaign, a new online hub will be a fresh source of relevant information for people seeking advice and support.
It follows predictions from the Financial Ombudsman Service earlier this year that fraud and scam cases would still dominate its caseload in 2024.
Situation with scams is a pandemic, not epidemic
The state of play has been touted by YourMoney.com as a ‘scam epidemic’, but Mike Haley, chief executive of fraud prevention service Cifas, believes the problem should be considered a pandemic instead.
Haley was appointed the chief executive of Cifas in 2018, in his latest role of a 30-year career that includes leading counter-fraud efforts for the NHS, Ministry of Defence, and HMRC.
Since its formation in 1988, Cifas has built the largest fraud risk database in the UK and is at the forefront of investing in tools for businesses and customers to avoid being duped by fraud.
The service also educates and trains organisations on what fraud risks are trending and how they can improve their data security to prevent them from occurring again.
Haley told YourMoney.com about his company’s prominent role in the battle against fraudulent activity in the UK.
He said: “I was in an interview and I thought about that term of an epidemic, but I looked up the term pandemic instead and we might be in that particular territory because this is a huge, single global issue.
“As we saw with the actual pandemic, you can have waves and waves of new infections. If you like, an epidemic, you can then get control in your own country. But, 70% of the fraud in this country has some sort of footprint overseas. So that’s why we should call it a pandemic.”
‘Technical arms race’
When asked what the biggest challenge he faces in 2024 is, Haley said: “I think it’s hard to avoid cliches but, you know, there is this arms race – a technological arms race. So a really good example at the moment is the use of deep fakes, with face and voice swapping.”
One example of the ongoing ‘arms race’ is what Haley describes as “the really scary” romance scams, where AI technology is used on video-calling so it looks like a real person is talking on the other side of the phone.
Since the rise in cases, he said Cifas has funded technology for phone apps to combat them. These work through a watermark that can demonstrate what is a deep fake image and what is genuine.
He said: “We’re always slightly behind because we’re fighting with one arm behind our back with technologies. We’ve got to make sure it’s GDPR-compliant and that customers will be happy these data and technologies are used.”
Meta joining the online fraud charter is ‘better late than never’
Criminals using sophisticated methods to con innocent people might seem like the main hurdle in the bid to clamp down on scams. However, the struggle to engage the social media giant Meta – which is made up of Facebook, WhatsApp, and Instagram – has also proved to be tough.
In December, the company, alongside fellow giants eBay, Amazon, and LinkedIn, signed the Government’s Online Fraud Charter and committed to a list of measures to help protect users accessing their sites from scams.
Actions the companies must do include eliminating any fraudulent content immediately from their platforms and verifying new advertisers.
Regarding the companies signing the bill, Haley said: “Well, better late than never, right?”
‘Pace within the industry needs to move along’
He added: “It’s easy, I think, for us to say, ‘Oh, Meta and other brands should participate’ but I do think it’s given a sense of maturity from the organisation.
“Now that they’re coming into the community and have signed the charter, I’d like to see them start sharing more data for our members, banks, and telephone companies. Of course, we want to welcome them in because they have loads of great data and great analysts.”
One of his frustrations was with the pace at which technology is implemented by companies. He said: “With Instagram, when they see something’s a bit fishy with a photo, or if it breaks a guideline, it can come down immediately. So the technology must be there ready to use.
“I think sometimes the industry moves rather slowly. Because everyone has to move at the same pace, but I think we need to move that pace along and realise that this is an accelerating issue.”
Haley encourages the huge firms to “come and join our community”, adding, “I don’t feel like I need to pitch this, it should be a natural thing to do for the companies. But it can be really frustrating.”
New app to be tested in March
The CEO also announced testing for a new app on the horizon, which is one source of optimism that the not-for-profit business is developing.
He said: “We’ve been building an app-based identity protection scheme to combat what happens when someone gets your personal details. In cases of bank accounts and credit cards, when a fraudster runs up debt, the first you might hear about it is when you start getting statements through the door and you think ‘what’s this?’
“Then you’ve got to ring the banks up and persuade them it’s not you who has used it, and you need to go through all your transactions. But, by then the banks have already lost money on the credit card, store card, or whatever else, notwithstanding all the stress for people it causes as well.
“So what we’re doing is bringing the consumer back into that part as you will then be able to look and go ‘yes, that is my identity’ or ‘no it’s not’. So it stops a world of pain in the future. And I think this will have the potential to really reduce identity theft – which is very significant.”
The app is slated to be tested in March, and Haley is pleased with the change in chasing identity fraudsters “at the highest level” from “going with a whack-a-mole approach” to “turning the tide on the fraudsters.”
‘Trust your gut’
He added: “We’ve gone from just sharing data on identity fraud to now thinking, how do we stop identity fraud? So I’m really proud that we decided to invest in that.”
And what about advice for when you see a transaction or receive a phone call you’re suspicious of? – “always trust your gut”, Haley says.
The fraud expert said: “Always trust your gut instinct and take a minute to go and check. It’s going to be a while before Meta and other companies build in that technology to take down these deep fakes or identify to you that something is a deep fake or not a real person.
“But I do think that technology will come, and then [fraudsters] will have to come up with something else. In that window, until the technology tells you directly there’s an issue, I think people should have incredible scepticism online, particularly about cryptocurrency, romance, and large investment offers.”
Anyone in the UK can contact Cifas if they are concerned they have been involved in a scam and want some extra security. Once contacted, Cifas offers a ‘Protective Registration’ whereby it can let banks, for example, know if anyone is applying for a product that it is the correct person doing so.
