Annual fraud losses in the UK could amount to £193 billion, much higher than the government estimate of £50 billion.
According to research compiled by the University of Portsmouth for the 2016 Annual Fraud Indicator report, fraud is taking place on an industrial scale and is one of the biggest crimes afflicting UK plc today.
Professor Mark Button, director of the centre for counter fraud studies at the University of Portsmouth, says many organisations lose around five percent of their annual revenue to fraud.
“One of the largest growing fraud vectors is digital fraud. The global threat environment is rapidly changing, and the growing size and scope of breaches and exposure of personally identifiable information (PII) is concerning, because it can expose people to significant fraud. Individual point solutions for fraud prevention fail to deliver the visibility needed to protect financial institutions from threats posed by an increasingly complex world of cyber-crime,” said Lisa Baergen, director at NuData Security in commentary emailed to SCMagazineUK.com.
Private sector fraud losses are estimated to be £144 billion each year, or 74 percent of the total. The UK has seen a significant jump in phishing attacks in the past 12 months as cyber-criminals increasingly targeted consumers and company staff with online scams. Get Safe Online discovered that phishing attacks rose by more than a fifth (21 percent) last year and were estimated to cost British companies over £280 million.
Email phishing accounted for 77 percent of all reported incidents. Nearly a third (29 percent) of these were found to contain a potentially malicious link that could deliver malware directly to the user's computer or request personal details.
Public sector losses were estimated at £37.5 billion per year (20 percent). Central taxation (£15.4 billion) and benefits fraud (£2.4 billion) are subject to some of the most accurate and critical fraud loss measurement. Individual fraud losses estimated at £10 billion (five percent) with identity fraud growing steadily over the past 10 years as a problem costing an estimated £5.4 billion a year.
“Clearly, increasing effort and investment in seamless digital offerings that can continue to offer the same level of due diligence and consumer protection, with real-time alerts to identify high-risk and fraud activity, will be critical. In the meantime, the growth of the Internet of Things will also make the development of improved fraud prevention systems hugely important,” said Nick Mothershaw, director of fraud and identity solutions at Experian.