Key Fraud Trends: How to Stay Safe in the Changing Fraudscape

Rosalind Madge our consultant managing the role
Posting date: 8/9/2018 9:06 AM
Sharing and collecting data is part of our everyday lives. Whether our information is shared over social media, e-commerce sites, banks, or elsewhere, this can open up risks. 

2017 saw the highest number of identity fraud cases ever, an increase in young people ‘money muling’ and higher bank account takeovers for over-60s. Whilst overall fraud incidences fell 6%, these cases highlight just some of the changing trends as fraud issues stem more from misuse than ever before.

Dixons Carphone, Facebook and Ticketmaster are just three cases you may recognise from a string of high profile data breaches this year. Technological advances, more accessible and available data, coupled with an increased sophistication of fraud schemes, makes it more likely that data breaches and fraud attacks will become regular news items. But how is the fraud landscape changing and can technological advances be advantageous in detecting and reducing fraud?

Identity fraud increasing for under 21s


In June 2018, Dixons Carphone found an attack enabled unauthorised access to personal data from 1.2 million customers. It’s now been uncovered that the number is much higher, closer to ten times initial estimates. Whilst no financial information was directly accessed, personal data such as names, addresses and emails enable fraudsters to fake an identity. Younger fake identities are used more for product and asset purchases which typically require less stringent checks, such as mobile phone contracts and short-term loans. 

In 2017, Cifas, a non-profit organisation working to reduce and prevent fraud and financial crime, reported the highest number of identity fraud cases ever. Under 21s are most at risk seeing a 30% increase as they engage more with online retail accounts. Whereas previously identity theft would manifest itself in fraudulent card and bank account activity, it’s now being used to make false insurance claims and asset conversion calling for stronger detection in these industries. 

Young People Used as Money Mules


This age group aren’t only being targeted for identity theft; there’s a 27% uplift in young people acting as money mules. ‘Money muling’ is a serious offence that carries a 14-year prison sentence in the UK. In most cases, younger people are recruited with the lure of large cash payments to facilitate movement of funds through their account, taking a cut as they go. 

In a world where young lives are glamourised and luxurious goods are displayed over social media, this cut can be particularly appealing. Whether aware, believing the reward outweighs the risk, or unaware a money laundering crime is being committed, deeper fraud controls are needed across social media as much as bank accounts. This raises the question as to whether banks should be linking social media to customer details to stop money laundering early on?

Increased bank account takeover for over 60s


Cifas also reported an increase in account takeovers for over 60s for the same period. Seen by fraudsters as a less tech-savvy and therefore more susceptible demographic, over 60s are increasingly being targeted with online and social engineering scams. The same features which can make some over 60s a target for these scams, can also mean that account takeovers are not immediately noticed and reported, posing yet another difficulty for fraud monitoring and prevention. Vigilance and proactiveness is key. Here are three tips to get you started:

  1. Never give personal or security information to someone who contacts you out of the blue, either online, on the phone, or face to face. Always phone and check with the company first. If you make the call then you know you can trust the person on the other end.

  2. Check with your bank to see if they offer an elder fraud initiative such as a monitoring service that scans for suspicious activity and alerts customers and their families or educates seniors on types of scams and how to avoid them.

  3. When in doubt about something, delay and seek a second opinion.

Check with your local library, government offices, or non-profit organisation for more top tips to stay safe from scams and social engineering.  

Industry approach


Traditionally, financial services organisations have been at the forefront of developing fraud controls; they are often the ones most impacted by the financial risk (the monetary cost of the attacks on their business) and regulatory risk (ensuring their business is adhering to regulations and controls).

However, with modern day trends and the changing nature of fraud, all industries need to be focused on reputational risks and prevention. Single big events like Facebook and Dixon Carphone’s data breaches can have a far-reaching impact. 

But, there is light at the end of the tunnel. Monzo, an online bank, which bills itself as the future of banking has stepped up the game when it comes to their customer’s security. Upon reports of fraudulent activity on customer cards, they took immediate action to correct the problem. Then they took things a step further, introducing digital analytics to help identify trends and patterns. As patterns emerged, Monzo then notified both the breached business and the authorities.

Perhaps a cross-industry collaborative approach is needed as, after all, fraudsters are collaborating. By doing so, businesses will become more proactive, rather than reactive, and can put measures in place to stop potential fraud.

If you’ve got a nose for numbers and want to help secure the reputation of businesses the world over, we may have a role for you

To learn more, call our UK team at +44 020 8408 6070 or email us at ukinfo@harnham.com

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