Consumer fraud - why a joined up approach is the only solution
March 03, 2021
Sarah (not her real name), a 29 year old project manager from London, was working from home mid-pandemic, when she received a call purporting to be ‘the tax office’ claiming she owed £2,400.
Sarah’s instinct was that this was wrong as she is taxed through her employer. However, the caller stressed that she had failed to respond to letters and calls, and it was the last day to settle the balance before a criminal court case would be filed against her, and a warrant placed for her arrest. They convinced her she would be able to claim back any payments from them if a mistake had been made and even brought a ‘Manager’ on to the call to emphasise their claim.
After a lengthy call, Sarah agreed to make a payment and handed over her debit card details. The caller informed her the card was unsuccessful and so she provided further card details. Immediately after the call, and in the space of a few seconds, they debited over £6,000 from both of the accounts.
We’re all at risk of falling victim to consumer fraud
Consumer fraud is a high volume crime area as illustrated by the Crime Survey for England and Wales (CSEW) statistics showing an estimated 3.8 million incidents of fraud in the year ending March 2019 with only around 15% being reported to the police (either to Action Fraud, the UK’s national reporting centre for fraud and cybercrime or to a police force). Worryingly nearly 7% of all UK adults were a victim of fraud in this period which now accounts for one in three crimes and is firmly on the radar of the media and local MPs through pressure from their constituents.
While consumer fraud is an ever growing problem there are challenges in providing a joined up response. Criminals often target vulnerable people or organisations lacking controls around security, internal processes, technology or data quality. Often organisations and the local police do not have the number of specialist staff, easy access to the data or the technical systems in place to respond. A report by Sir Craig Mackey QPM and Jerry Savill into Action Fraud in 2020 cited a lack of proper investment and inadequate technology as hampering efforts to respond.
Sarah, like many of us, wasn’t aware of the system in place to report the fraud she experienced. And when she did come to report it, she met a number of challenges along the way. Despite starting off by calling her bank, Sarah was never sign-posted to consumer bodies and only found Action Fraud later on after doing her own web search.
So what is going wrong?
Sarah’s experience could have been better. The bank could have provided her with a route to report the fraud, or better still, automatically registered it with the police directly so that the fraudster could have been investigated immediately. Technology can never replace human contact, but technology can make a process more efficient and effective for many more people - and stop fraudsters in their tracks so they can be found and prosecuted.
In fact, we would argue that the link between the private and public sector is critical if we want to effectively tackle fraud and cyber-enabled crime in the UK. Both in terms of a shared strategy but also in terms of the technical interconnections, for example through Application Programming Interfaces (APIs), to share data seamlessly. But there is a long way to go in making this a reality. The landscape is often not joined up and victims either don’t know where to turn or are passed from one organisation to another, sometimes with little hope of success.
Retailers, financial services, telecom and software providers, payment platforms and social media platforms all have part of the information needed to stop fraud before it occurs, help block fraudsters, plus trace and return stolen funds. They all, along with the government, police, justice sector and consumer bodies, have a role to play. Numerous studies have been undertaken and reports published on how to make real change, including the report cited above, but movement is slow and organisations still don’t have a clear integrated plan or technology roadmap on how to change the game in favour of victims and put fraudsters behind bars. There will be challenges along the way - but the case is ever clearer, the technology to enable change is there which, if engaged effectively, ultimately means greater protection for the consumer.