The scale of fraud in the UK may be significantly higher than figures show, suggesting the fraud epidemic is even worse than feared, according to industry experts.
Fraud has skyrocketed in recent years as a result of the rise of online payments, the pandemic and lax enforcement. Figures from UK Finance put the total lost to fraud in 2022 at £1.2bn.
But experts suggested that the true figures were likely much higher.
Boss of fintech firm Tide, Oliver Prill, said no survey had a complete picture of the problem while many individuals probably did not report scams. “There’s probably a very high degree of underreporting,” he said.
“We actually think the whole current level of APP fraud could be somewhere between a billion and one and a half billion,” Prill said.
UK Finance figures estimate about half a billion is lost to APP fraud specifically. Its figures are calculated from confirmed fraud cases out of UK Finance members.
Victims may not report because the figures involved are small, they are partly responsible or they may not even know they have been defrauded.
Andrew Durant, senior MD in FTI Consulting’s forensic and litigation practice, agreed that there were no reliable figures to measure the scale of the problem.
“There needs to be a proper measurement of fraud which can enable people to have a more complete picture of where fraud takes place and why it takes place,” Durant said.
The lack of available data on fraud makes it extremely difficult for policymakers to get a handle on the problem, Durant argued. He suggested that the government’s fraud strategy would do little to alleviate the problem.
“I don’t believe they’ve got a fraud strategy… how can you have a strategy when you don’t know the scale of the problem.”
The government launched its fraud strategy earlier this year which included plans to clamp down on spoof numbers as well as create a National Fraud Squad with 400 new posts. The government hopes to put more fraudsters in jail for offences.
Both Prill and Durant suggested that the most effective strategy would be to have a more aggressive enforcement strategy.
Prill said the UK has been “very lax on law enforcement. A very very small number of fraudsters ever get pursued.”
“If you don’t pursue a crime, people are more likely to commit crimes and so we really want is a couple of thousand police officers that just relentlessly go after fraudsters,” he continued.
Durant argued that there should be a greater focus on the large corporate frauds rather than smaller cases.
“There are fewer cases but they are hugely significant in terms of size and impact. It doesn’t get as much attention as it should as it affects fewer people directly but the ripples affect employees, their families and the local communities,” he said.
A Home Office spokesperson said: “This government is absolutely committed to cracking down on scams and we continue to work intensively with partners across government, law enforcement and industry to protect the public and businesses from fraud.
“The Fraud Strategy is informed by a robust understanding of the scale and nature of fraud, and we continue to engage with industry, academic experts and stakeholders to strengthen data to track progress,” they said.