Provided by: RS Risk Solutions

Fraud More Than Doubles in 2023, Report Found

Fraud in the UK leapt in value and volume in 2023. In fact, the value of recorded fraud in 2023 was £2.3 billion, more than double that recorded in 2022 and he second biggest year for scams in the past two decades. Alongside the significant uptick in fraud value, fraud cases rose by 18% in 2023 to a three year high. Worse still the true level of fraud could be significantly higher; fewer than 1 in 7 offences are reported to the police, according to statistics from the crime survey for England and Wales.

An annual FraudTrack report analyses data from all reported UK fraud cases with a monetary value of over £50,000. The 2023 results showed that the number of reported fraud cases is rising, and the amounts are increasing. In fact it was found that high value fraud cases over £50 million rose by 60% year on year in 2023. Reported fraud was highest in the arts, entertainment and recreation sector, closely followed by public administration.

However, looking more closely, more than half of the fraud value in the findings resulted from two long running fraud cases. Additionally 2023s figures were significantly lower than those witnessed in the COVID-19 pandemic, where a substantial quantity of support schemes at the time. Regardless figures point to a volatile risk environment in which several factors are driving fraud, including:

• The cost of living crisis – Inflationary pressures, rising energy bills and global supply chains have put financial pressure on individuals and businesses, providing the rationale for criminals to commit fraud.
• Evolving technology – Technology continues to be a driving force behind fraud. In fact more than 70% of scams in 2023 happened on social media, online marketplaces and dating apps, according to Barclays Bank.
• The development of cyber fraud centres – Malicious actors have formed organised crime syndicates to share information and collaborate. This makes it easier to target online victims with various fraudulent schemes.
• Artificial Intelligence (AI) – The rise of AI has blurred the lines between reality and forgery, making it harder for consumers and businesses to identify scams.

Next Steps

To protect themselves from fraud and prevent related losses, organisations should implement strategies such as robust cyber security measures and workforce scam prevention training programmes. Employers should also review any measures required under the Economic Crime and Corporate Transparency Act 2023, which received Royal Assent towards the end of last year. Specifically, the acts “failure to prevent” terminology means that organisations could be held liable for corporate fraud where an “associate” committed an offence and the company did not have reasonable fraud prevention procedures.

Contact us today for further risk mitigation guidance and insurance solutions.