UK Fraud on the Rise with Doubling Value in 2023
Fraud incidents in the UK have surged, with their value more than doubling to £2.3 billion in 2023.
BDO's latest report indicates a 104% increase from 2022, driven primarily by a small number of high-value cases. Social media has become a hotspot for scams, contributing significantly to this spike.
This £2.3 billion figure equates to the collective lifetime earnings of approximately 1,645 people, based on the UK's median salary over 40 years.
While the total number of fraud cases rose by 18%, underreporting remains an issue, with the Crime Survey for England and Wales suggesting that only a fraction of offences are formally reported.
Although the overall reporting of cases is less than pre-pandemic levels, 2023 saw costly incidents, including a £585 million bribery settlement by Entain and Bernie Ecclestone's £650 million tax evasion case. These two alone influenced the yearly data, with corruption and tax fraud being the most significant types of fraud.
The report highlights the influence of technology, with AI enhancing cybercriminal capabilities amid economic strain and geopolitical challenges.
There's been a considerable growth in online scams, with UK banks reporting a scam 'epidemic'. Notably, over 70% of scams originate on social media, online marketplaces, and dating apps.
Cybercriminals are also leveraging AI to create sophisticated fraud tools, sold on the Dark Web for writing malware or conducting phishing attacks. The proliferation of AI increases cyber risks, with such tools becoming more accessible.
The entertainment sector experienced the highest fraud levels, partly due to the costly Entain case. Appeal for illicit streaming services grew as official subscription rates rose. One notable case involved five men illegally streaming football and profiting over £7 million.
For 2024, BDO foresees an uptick in cyber threats, with fraudsters exploiting AI advancements and companies across all sectors, including non-profits, likely to face sophisticated cyberattacks.
The rise of environmental, social, and corporate governance (ESG) fraud is predicted as regulations tighten, with greenwashing and carbon credit fraudulent activities expected to increase.
Legislative changes, such as the Economic Crime and Corporate Transparency Act, may increase reporting by holding companies accountable for fraud committed by their associates. Additionally, new banking rules requiring reimbursement for certain APP fraud victims will likely contribute to an increase in reported cases.
This £2.3 billion figure equates to the collective lifetime earnings of approximately 1,645 people, based on the UK's median salary over 40 years.
While the total number of fraud cases rose by 18%, underreporting remains an issue, with the Crime Survey for England and Wales suggesting that only a fraction of offences are formally reported.
Although the overall reporting of cases is less than pre-pandemic levels, 2023 saw costly incidents, including a £585 million bribery settlement by Entain and Bernie Ecclestone's £650 million tax evasion case. These two alone influenced the yearly data, with corruption and tax fraud being the most significant types of fraud.
The report highlights the influence of technology, with AI enhancing cybercriminal capabilities amid economic strain and geopolitical challenges.
There's been a considerable growth in online scams, with UK banks reporting a scam 'epidemic'. Notably, over 70% of scams originate on social media, online marketplaces, and dating apps.
Cybercriminals are also leveraging AI to create sophisticated fraud tools, sold on the Dark Web for writing malware or conducting phishing attacks. The proliferation of AI increases cyber risks, with such tools becoming more accessible.
The entertainment sector experienced the highest fraud levels, partly due to the costly Entain case. Appeal for illicit streaming services grew as official subscription rates rose. One notable case involved five men illegally streaming football and profiting over £7 million.
For 2024, BDO foresees an uptick in cyber threats, with fraudsters exploiting AI advancements and companies across all sectors, including non-profits, likely to face sophisticated cyberattacks.
The rise of environmental, social, and corporate governance (ESG) fraud is predicted as regulations tighten, with greenwashing and carbon credit fraudulent activities expected to increase.
Legislative changes, such as the Economic Crime and Corporate Transparency Act, may increase reporting by holding companies accountable for fraud committed by their associates. Additionally, new banking rules requiring reimbursement for certain APP fraud victims will likely contribute to an increase in reported cases.