New technologies and cybercrime have contributed to UK fraud breaking the £1 billion barrier for the first time since 2011.
According to professional services company KPMG, cyber-enabled fraud rose by 1266% compared to 2015 figures.
As an example of the kind of criminality that has contributed to the dramatic rise in cybercrime, the company pointed to an attack that saw £113 million stolen for bank customers who, thanks to the sophisticated nature of the attack, were unable to make or receive calls while their accounts were being drained.
The fraudsters made between £1 million and £2 million a week at the scam’s peak and operated like a nine-to-five business using information from corrupt bank insiders.
“Both public and private organisations openly acknowledge that cyber attacks are one of the most prevalent and high-impact risks they face, and yet many operate on the basis ‘it won’t happen to me’,” says Hitesh N Patel, UK Forensic Partner at KPMG.
“Organisations must keep abreast of the cyber threats, both physical and digital, to ensure the protection mechanisms don’t become obsolete given the pace of technology and business change. You can have variety of IT protections in place to defend yourself, but it’s all for nothing if you are tricked into giving away the keys to the electronic vault.”
KPMG’s Fraud Barometer also identified an emerging trend of consumers carrying out tech-enabled theft driven by a hunger to maintain a comfortable lifestyle on a low budget.
The professional services firm highlighted one case where a 51-year-old man was jailed for six years for masterminding a £60m fraud to supply free cable TV using illicit set-top boxes.
With the aid of five accomplices, the man imported boxes from Asia and bypassed their encryption in order to allow people to watch a cable TV service without a legitimate subscription. He promoted the business on internet forums and via his own website.
“Through the rapid rise of technology and online platforms, more people than ever are being targeted by fraudsters who have unrestricted access to a larger pool of victims. However, we are also seeing the internet being used by consumers who are being tempted to obtain goods and services that they have, or perhaps should have, a fair idea are not legitimate,” said Patel.
“Consumers may often turn a blind eye, or consider this a victimless crime, but these cases show individual victims who ended up paying a high price with their wellbeing. In addition, this shadow economy activity, which directly promotes money laundering and tax evasion, often help funds other more serious organised criminal enterprises, including human trafficking, drug smuggling and terrorism.”