A recent report reveals that fraud in the UK increased by over 100%, reaching a total of £2.3bn in 2023. This marks the second highest level of fraud in the past 20 years. The report also cautions about the potential harm of fraudsters utilizing artificial intelligence to deceive consumers in the future.
BDO’s most recent FraudTrack report revealed a significant increase in reported cases, with a rise of 18% to the highest level in three years. Additionally, there was a 60% year-on-year increase in high-value cases over £50m in 2023, with half of these cases totaling over £200m.
According to BDO, the increase in online scams, phishing attempts, system breaches, and authorised push payment (APP) transactions were contributing factors to the overall rise in fraud. These fraudulent methods involve tricking individuals into unknowingly transferring money to the scammers.
According to Kaley Crossthwaite, a partner at BDO, an examination of data from the past ten years reveals a growing trend in reported instances of fraud and the associated monetary amounts. Crossthwaite also predicts that this trend will persist in the future. Unfortunately, she explains that fraudsters are constantly adapting and utilizing new methods, such as artificial intelligence, in order to evade detection.
British financial institutions have issued a cautionary statement about the increasing prevalence of fraudulent activities. In 2019, Barclays reported that the majority of scams (over 70%) were executed through social media, online marketplaces, and dating applications.
The most prevalent location for fraud in the UK was London and the surrounding area, which saw a significant rise of 170% in the total amount lost due to various well-known instances, and a 43% increase in the number of reported incidents compared to the previous year.
Significant instances in the previous year involved Entain, which possesses the Ladbrokes and Coral betting franchises, coming to a resolution of £585m with HM Revenue and Customs, the UK’s taxation agency, regarding purported bribery at a subsidiary in Turkey.
The ex-leader of Formula One, Bernie Ecclestone, admitted to committing fraud by not disclosing over £400 million of assets outside of the UK to the government. He has agreed to compensate HM Revenue & Customs with a payment of £652 million.
In 2022, the east Midlands ranked 12th in reported fraud cases, but it has since risen to become the region with the second-highest level of reported fraud.
According to BDO, the actual extent of fraud is expected to be much greater than £2.3 billion, as data from the Crime Survey for England and Wales shows that only a small fraction of fraud cases are reported to the authorities.
A study conducted last year revealed an increase in the amount of individuals engaging in “minor” fraudulent activities, such as evading council tax or attempting to recoup lost bets on gambling, due to the current financial strain.
Source: theguardian.com
