Financial organisations reported a case of fraud to the national database every two minutes, data reveals.
Despite the startling regularity, the number of cases fell by 9% in 2023 compared to the year before, dropping to 374,160 cases. It also remains the largest reported crime to the police, with 40% of all crimes being fraud.
Identity fraud remains the most common type of fraud and represents 64% of all the cases reported, which marks a slight dip from 2022, when it was 68% of cases involved.
But, there are still worries over fraudulent social media users and the growing threat of AI and ‘sophisticated data-harvesting techniques’ that prey on vulnerable households who may be battling the cost-of-living crisis.
The second most prominent issue is the misuse of a facility, which accounts for a fifth (21%) of all cases. This is where an account holder allows their account, policy, or product to be used to facilitate criminal financial activity.
Facility takeover numbers jump
Meanwhile, the fraud which saw its biggest jump in regularity was facility takeover, where scammers compromise customer’s personal data to ‘hijack’ an existing product.
One in 10 cases reported to the National Fraud Database (NFD) involved this activity, a rise of 13% in a year, according to figures from Fraudscape 2024, a report by fraud prevention service Cifas.
While the number of people experiencing fraud remains higher than in 2021, a general drop in cases has been attributed to improved market conditions, tighter regulations and stiffer lending criteria.
Some of the regulations introduced in the last two years include a mandatory reimbursement requirement for authorised push payment (APP) fraud, the Online Safety Act and the Economic Crime and the Corporate Transparency Act 2023 (ECCTA).
Insider fraud rises by over a tenth
There are also amendments mooted in the Data Protection and Digital Information Bill and the new Criminal Justice Bill that aim to quell fraudsters.
However, cases to the Insider Threat Database (ITD) rose to 14%, owing largely to the increase in dishonest action by staff members.
Almost 50% more cases were reported to the ITD, and the majority of workers involved in the fraud were hired for less than a year. While this was an emerging issue in 2023, the cases spotted by internal controls or fellow staff members increased by a fifth and 44% respectively.
Stephen Dalton, director of intelligence for Cifas, says the impact of fraud and financial crime on people, companies and the public sector continues at “epidemic levels.”
Dalton said: “The ongoing economic uncertainty and cost-of-living pressures provide a rich source of opportunity for criminals to exploit people at their most vulnerable. These circumstances may also be the catalyst for some individuals to commit fraud and supplement their income during difficult times.”
Fraud prevention ‘takes huge collaborative effort’
Mike Haley, the CEO of Cifas, previously described the issue of fraud to YourMoney.com as a pandemic, and he has made further calls for more teamwork in the industry to tackle criminals.
Haley said: “Criminals are finding new and sophisticated ways to target consumers, such as through social media and AI and deepfake technology. We are committed to driving down these cases through the sharing of data and intelligence and building effective defences to prevent fraud.
“To achieve our goal takes a huge multi-sector, collaborative effort. That means having effective cross-government leadership in response to fraud, enhancing victim support, providing critical counter-fraud insight to social media and big tech companies, and educating young people about the serious consequences of financial crime.”
He added: “We continue to work closely with the fraud prevention industry and multiple sectors to stem the rising tide of fraud and financial crime.”
