Fraud ends up costing the British economy around £38bn per year, usually through the online transactions and communications that are now standard business practice. Although direct victims of customer fraud are often refunded by their bank or building society, the implications go much deeper – many businesses report a dip in trust and brand loyalty after exposure to large security breaches.
The means by which fraud may be committed are varied, depending on who the victim is. In 2010 UK consumers lost an estimated £3.5bn in lottery, loan and share scams, around 12% of that year’s total. 31% of that total came from the private sector, with financial service companies being the worst hit.
However, every time a fraudster finds a new way to defraud a corporate or financial system, the watchdogs charged with protecting those accounts find a new way to prevent it. Improvements in chip and pin technology and a series of public service announcements intended to warn consumers about common fraud techniques has gone a long way to educate and empower citizens to take charge of their own finances.
Consumer Direct, the government advice bureau, advises people to never rush into a deal, to keep thorough contact details with traders, to follow security measures for online payments, and to use credit cards for transactions over £100, which gives greater protection to the buyer.
Fraud may be big business, but it is increasingly well-documented, and personal details online are increasingly secure.