This is fraudscape 2021

The flagship intelligence report from Cifas, the UK’s Fraud Prevention Community

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Welcome

I am pleased to welcome you to this year’s edition of Fraudscape, which is key to understanding the challenges and threats we face as a community, and which areas we need to focus on to fight fraud together.

This report combines data from our National Fraud Database (NFD) and Internal Fraud Database (IFD), along with intelligence provided by Cifas members, partners and law enforcement. In 2020, Cifas members saved over £1.4bn through prevented fraud losses, but we know we can prevent and detect even more fraud by developing a better understanding of key fraud threats and enablers – which is the main purpose of this report.

The COVID-19 pandemic made 2020 one of the most challenging years the fraud prevention industry has ever faced. The UK lockdown in March 2020 meant that organisations had to adapt quickly, with many moving their businesses online and their staff to remote working. Consumers were also seriously impacted, with the large majority relying on the internet to buy goods, talk to their friends and family, and use services such as online banking. Fraudsters were quick to take advantage of these changes. Throughout the pandemic we have seen criminals target businesses, the government and consumers to abuse stimulus packages and grant relief funds in order to steal personal and financial information to facilitate identity fraud and create malicious campaigns around false vaccinations and false tests.

Only now are we starting to see the impact that the pandemic and its economic fallout have had on levels of fraud in the UK. Early signs indicate that fraud levels will surpass the pre-pandemic levels recorded by Cifas in 2019, and comparisons with the 2008 financial crisis suggest that later this year levels of identity fraud and misuse of facility will increase. 

As the UK’s leading fraud prevention service, our role in protecting Cifas members, stakeholders and the public from fraud has never been more important. Now is the time for the fraud prevention community to collaborate, so we can focus on the threats we face together and deliver a targeted and proactive approach to stop fraud.

Mike Haley
- Cifas CEO
Terms Explained

Overall

2020 was one of the most challenging years we have faced, yet Cifas members still recorded 309,849 cases of fraudulent conduct to the NFD, which is one case every two minutes. 

Identity fraud and misuse of facility were important challenges, accounting for 82% of the total cases recorded in 2020.

Facility takeover grew significantly last year, with the number of cases recorded rising by 21% on 2019.

Despite lower levels of recruitment, there were notable filings of dishonest actions and disclosing personal information to third parties. 

Despite the pandemic and economic situation impacting filing volumes, the first six months of 2021 do show a 13% increase in the number of cases recorded to the NFD compared to the same period of 2020.

What do the findings tell us?

IDENTITY FRAUD

185,578 cases were recorded in 2020, which is a 17% reduction compared to 2019. However, the first six months of 2021 do show a 11% increase on the same period in 2020.

A large proportion of identity fraud victims were aged between 31 and 40 years and 51+.

The plastic card and banking sectors were the most affected, with a slight rise for online retail.

2020 also saw a 23% increase in companies being impersonated. This may be due to the abuse of stimulus package offerings aimed at supporting businesses through the pandemic.

Analysis Cifas Commentary The Future of identity

MISUSE OF FACILITY

68,083 cases of misuse of facility were recorded last year, which, despite the 19% reduction from 2019, still accounts for more than a quarter of cases recorded. However, the first six months of 2021 do show a 23% increase on the same period in 2020.

The main product overwhelmingly targeted for misuse is bank accounts, which make up just over three quarters of misuse cases. 78% of cases involving the misuse of bank accounts have intelligence that indicates money mule activity.

A high proportion of adults aged 21 to 30 years were identified in cases where intelligence indicates mule activity.

There was a 26% increase in misuse of company accounts, which may be linked to the abuse of stimulus packages.

Analysis Cifas Commentary What can AML learn from fraud prevention

FACILITY TAKEOVER

38,421 cases were recorded last year, which is a 21% increase compared to 2019. However, the first six months of 2021 do show a 14% increase on the same period of 2020. 

44% of cases were carried out via telephony channels, and there was a 22% increase in this type of activity suggesting that there may be a perception that telephony channels are weaker.

41% of products are taken over within two weeks of the product being applied for. This is highly prevalent for bank accounts and telecoms products.

Analysis Cifas Commentary Leaving the back door open

Insider threat

290 individuals were recorded to the IFD in 2020 compared to 432 in 2019. However, the pandemic has limited recruitment and new risks have emerged with remote working. The pandemic has had a significant impact on employment, with 693,000 payroll jobs lost since March 2020.

Dishonest actions remained the highest reported case type, accounting for 44% of cases.

Cases recorded for unlawful obtaining or disclosure of personal data have risen by 43%. The individuals involved tended to be aged between 31 and 40 years and working in a branch or a store.

Analysis Cifas Commentary why do people commit INSIDER fraud?

Summary

Much of the impact of COVID-19 on fraud is still to be seen. Perpetrators are highly likely to exploit a range of vulnerabilities and uncertainties, including employment scams, travel scams and investment fraud, as well as the stimulus packages on offer.

The impersonation of companies throughout the pandemic means it is highly likely companies will be increasingly targeted if further provision is offered to business to support the economy.

Identity fraud remains a priority for all sectors, due to the rise of synthetic identities and readily available access to false documentation.

The rise in cybercrime as a service, such as phishing kits, fraud tool kits and hacking services, is an extremely high threat to all sectors.

Social media continues to be a key enabler for recruiting mules with more than two thirds of the UK population using a social media platform.

The pandemic has changed how mules “cash out”. Cashing out via cryptocurrency assets and wallets has become attractive to criminal networks due to the anonymity this provides.

Facility takeover has seen a significant rise during the pandemic. It is highly likely that digital channels will continue to be favoured but as organisations bolster their defences, threat actors may look to exploit vulnerabilities via telephony channels.

Remote working remains a threat and so it is essential that organisations review their working from home policies and audit the data and information that staff have access to.

Economic uncertainty as a result of the pandemic may put financial strain on employees who then may justify carrying out certain activities for financial gain. It is essential to screen staff not just at application, but throughout employment.

Together we must:

  • Protect businesses and their customers from fraud and financial crime, ensuring that all sectors implement standard checks and processes to identify and prevent fraud.

  • Collaborate with each other and share data, intelligence and learning to improve financial crime information sharing, and enrich our understanding of the threats the UK faces.

  • Ensure all organisations implement strong and effective internal fraud controls across all stages of the employee lifecycle.

  • Speak with a collective voice to raise the profile and awareness of the impact of fraud on businesses and the public, reinforcing the message that action must be taken to reduce fraud and its subsequent benefit in helping to fund serious organised crime.  

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Press

For any press enquiries please contact press@cifas.org.uk  

About Cifas

Cifas is the UK’s fraud prevention community. For over 30 years we have worked with hundreds of organisations to stop fraud and our community is made up of hundreds of organisations from across the sectors, including most banks, credit providers and telecommunication companies. We lead the fight against fraud by sharing data and intelligence, and provide a secure and established home for:

  • Trusted data of unparalleled depth and diversity – hosting the largest databases of fraud risk in the UK.

  • Dynamic intelligence to understand the fraud threat landscape now and in the future.

  • A vast network of organisations and people with a stake in fraud prevention.

  • Accredited education and trusted training for organisations and individuals.

If you are interested in joining Cifas click here 

For more information about our Fraud and Cyber Academy click here