| 20 February 2017
Crowe Clark Whitehill has just released its Financial Cost of Fraud report which states that fraud now costs UK organisations a staggering £125 billion each year, with cyber playing a part in most incidents.
Ryan Wilk, Director at NuData Security, says: “These enormous fraud losses, two-thirds greater than the UK’s entire GDP, are astounding. The magnitude of these losses can’t help but have a dampening effect on the economies of the ten countries studied, and be noticeably impactful to businesses who are experiencing up to 6.5% of losses of expenditure-- a 43% increase in fraud since 2008 per the report. It’s also bad news for consumers, who often bear the brunt of many direct costs (especially in account takeover and new account fraud). It’s absolutely no wonder that consumers are pushing back on companies to improve security, holding them accountable for it, yet still wanting to have a good experience going through the gates.
Financial fraud offers a lucrative source of income for cybercriminals, with 3.6 million fraud incidents last year. With such tempting promise of high reward and low prosecution rates, emboldened cybercriminals and have grown in their sophistication, exploiting the human-interest factor by posing as banks or suppliers and then duping consumers into revealing their personal details. These scams have also proved effective in targeting commercial organisations, as senior executives have been tricked into revealing sensitive information which enables access to a company network.
The increasing volume of attacks globally has also been attributed to more fraudsters willing to commit the crime, more data available on the black market, and more financial institutions and merchants that are vulnerable to attacks. Plus, as more countries fully adopt EMV, fraudsters have switched their tactics online and fraud will continue its migratory path to all available online channels.
To detect out of character and potentially fraudulent transactions before they can create a financial nightmare for consumers, we must adopt new authentication methods that they can’t deceive. Solutions based on consumer behaviour and interactional signals are leading the way to provide more safety for consumers, and less fraud in the marketplace.
To combat these types of attacks, consumers should always report emails to their banking provider. No legitimate organisation will ask for security or banking details, so consumers need to be suspicious of any email that requests this information
Meanwhile, there are steps that consumers can take to help secure themselves:
Shop with well-known companies online, or use safer payment systems such as PayPal, ApplePay, Android pay, to avoid providing your payment details directly to an unknown merchant.
Use a strong, unique password at every site and make sure to change your passwords regularly.
Don't use public computers or free, unencrypted Wi-Fi to conduct financial or retail transactions or interactions.
Don't fall victim to email and phone scams, where a consumer receives a call from "their bank" asking for personal, or financial account information. If it looks too good to be true, it most likely is. When I doubt, call the bank directly, based on the number printed on the back of your card, or on a recent statement.