Are you at risk of financial fraud?

Fraud is one of those things that many people are aware of but believe it will never happen to them. However, figures from Financial Fraud Action UK (FFA UK) suggest that the threat of financial fraud is greater than some people may think.

In the first half of the year (January-June), the cost of financial fraud increased to £399.5 million[1]. This is a 25% rise from the same period in 2015, when £320.3 million in financial fraud losses where recorded.

Broken down by payment type, we can see the following trends:-

Payment cards: This covers lost and stolen cards, remote purchase fraud, counterfeit cards, card ID theft and card not received. Fraud losses totalled the highest in this segment, at £321.5 million in the first half of the year. This is a 31% increase on the £244.6 million losses recorded in the first half of 2015. However, £475.7 million in losses were prevented between January and June.

Remote purchase fraud: As our reliance on digital increases, remote purchase fraud is increasing significantly. This is potentially because there are now more opportunities for fraudsters to record card details during legitimate transactions, download malware onto a victim’s device or simply obtain card details fraudulently. Between the first half of 2015 and the first half of 2016, remote purchase fraud increased by 31% to £224.1 million. FFA UK noted that malware and data breaches were behind many of the crimes, because of the growing number of e-commerce sites.

The good news is that banks are doing more to stop fraud happening and in the first six months of the year they managed to stop £678.7 million worth of fraud losses. However, as banks get more sophisticated, so too do fraudsters and Katy Worobec, director of FFA UK, explained that many are now relying on scams that target consumers to commit fraud.

Reducing your fraud risk

FFA UK is warning customers to take precautions to stop fraud happening. They recently launched the Take Five campaign, which is supported by Noddle, all major banks and financial services take_five_logo_endorsement_rgb providers. It is designed to get people to stop and consider whether the situation they’re placed in is genuine. For instance, if you get a phone call from your electricity provider and they ask you to confirm your card details, question if this is really something they would really ask you to do.

Tony Blake, senior fraud prevention officer at the Dedicated Card and Payment Crime Unit, the FFA UK-sponsored police unit which investigates fraud, said: “Fraudsters can be very convincing and often pose as representatives from a trusted organisation in order to appear genuine. If you are asked to transfer some money or provide your personal details and you think it could be a scam, take five minutes to think about what you are being asked to do. A genuine organisation will not mind if you check who you are speaking to, because people are not always who they say they are.”

As part of the Take Five campaign, FFA UK is recommending the following 5 steps:-

  1. Never disclose security details, such as your PIN or full banking password
  1. Don’t assume an email or phone call is authentic
  2. Don’t be rushed or pressured into making a decision
  1. Listen to your instincts
  1. Stay in control

Find out more here.

There are, of course, other things you may want to do to help prevent fraud and making sure you have a secure password is one of them. Our partner Cyber Streetwise recommends choosing three random words, including numbers and symbols, to create a strong password. For example, I<3my2Dgs. However, you need to make sure your password isn’t something that’s easy to guess or find on social media, such as birthdays or the names of loved ones.

It’s also recommended to never use a password more than once and try to change them regularly. If you have the same password for everything, if a fraudster gets hold of it, they will have access to all of your accounts.

Another top tip is to keep your social media profiles locked down so people can’t find out key information and build a picture of you to commit fraud. The below video from Cifas shows just how easy it is for fraudsters to find out your details through social media if you don’t have the right security preferences in place.

It’s also good practice to check your credit report regularly for searches you don’t recognise. This might be a sign that someone is trying to apply for credit in your name, so if you don’t know why a search has appeared, get in contact with the company who made it to clarify.

Following these simple steps could help to reduce your risk of financial fraud, saving you money, stress and hassle.