Scams and fraud are under police criminally in Britain
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More and more people are doing it. According to the Crime Survey of England and Wales, the year up to June saw 6.8 million incidents of computer fraud and misuse (i.e. mostly hacking). This is 43% more than two years ago and 40% more than any other crime. The police have long classified common and simple offenses such as burglary, assault and assault into a category they call “volume crime”. Fraud is bigger than all that.
“We don’t have a lot of things in our homes that can be stolen and fenced off in the pub,” says Mike Haley, the boss of Cifas, the UK’s fraud prevention agency. But Britons have bank accounts that can be emptied and equity in their homes that can be stolen when transferring ownership. They were passionate about digital commerce and banking even before covid-19, which makes them vulnerable to online fraud. At the start of last year, the European Commission found that 67% of Britons had been victims of fraud or scams. Only two EU countries had higher rates.
The nature of fraud has changed, particularly over the past year (see graph). Payment card fraud has declined, partly because banks have become better at detecting suspicious transactions and partly because the pandemic has kept people in their homes, reducing the chances of card theft. Mobile and Internet banking fraud has increased, but so has mobile and Internet banking.
The most important area of growth is authorized fraud, in which ordinary people are tricked into transferring money to criminals. “It is much easier to defraud someone than to defeat security measures,” says Ben Poxon of UK Finance, a commercial group. Over the past year, criminals have exploited people’s desire for love (pretending to be loving but financially needy), pet company (selling puppies that don’t exist), and financial returns in one. low interest rate environment (by creating bogus funds).
Some scams are sophisticated and targeted, extracting money from victims for several months. They can be run by international organized crime groups, which behave like businesses – some even have arbitration procedures for crooks who feel underpaid, according to Group-IB, a security company. But Jon Shilland, who works on fraud for the National Crime Agency, also says many perpetrators are in Britain. They learn fraud tools online or learn from friends: “The bar at entry for a lot of frauds is very, very low. “
Some steps are taken to slow the rot. Call centers, which are often targets of scammers, have bought technology that can recognize people’s voices. Banks can tell when a cell phone is strangely held. Google has begun to insist that companies advertising financial services be approved by the Financial Conduct Authority. But that’s “not a high bar,” says Anne Boden, boss of Starling, an online bank. The internet is always rife with fraudulent advertisements, which cost customers and their banks money. In the first half of the year, 42% of all money lost to authorized frauds was refunded, according to UK Finance.
Respected organizations behave in a way that confuses people and makes them guilty of fraud. The National Health Service has sent millions of text messages with links to book covid vaccines. “We’ve spent centuries saying don’t click on links in text messages,” says Brian Dilley, Fraud Prevention Manager at Lloyds Bank. On November 17, tech company Amazon, which was in a business dispute with Visa, a credit card company, encouraged many customers to change their payment method by clicking a link.
The resources devoted to the problem are eclipsed by its magnitude. Fraud and computer misuse account for 58% of crimes suffered by the public, according to the Crime Survey. In 2018, the Police Foundation, a think tank, found that only 0.8% of police personnel worked on economic crime.
The cost of mass fraud is paid in lost money, in higher fees for financial services and in distress. And there could be another effect, difficult to measure but pernicious. Mr Shilland is concerned that people are becoming so suspicious that companies and agencies such as the tax office will find it difficult to reach them. An increasing proportion of legitimate communications are being flagged as fraudulent. Fraudsters have even tried to impersonate the National Crime Agency.■
This article appeared in the Great Britain section of the print edition under the headline “Criminally underpoliced”