Annual cost of fraud in the UK could be as high as £193bn a year

The latest Annual Fraud Indicator report, based on research from Portsmouth University, has revealed that the annual cost of fraud in the UK could be as high as £193bn a year, far higher than a government estimate of £50bn.

Lisa Baergen, director at NuData Security shared the following expert opinion with @DFMag:

“One of the largest growing fraud vectors is digital fraud. The global threat environment is rapidly changing, and the growing size and scope of breaches and exposure of personally identifiable information (PII) is concerning, because it can expose people to significant fraud. Individual point solutions for fraud prevention fail to deliver the visibility needed to protect financial institutions from threats posed by an increasingly complex world of cyber crime.

This year, we have determined that fraudsters are leveraging more sophisticated attack vectors, focusing increasingly on account takeover and account creation. In 2015 we identified 45.95% of accounts created, across our financial institution and e-commerce clients, as fraudulent attempts against customers of some of the largest banks and merchants globally. This was a 66% increase in account creation fraud since 2014, when the rate was 27% of all accounts.This shows us that thieves are beginning to value user accounts, with related details of payment information attached, more highly.

This puts an additional burden on the institution to protect their customers from fraudsters that know their customers better than the banks do.  In order to hijack an account, fraudsters often attempt to login, just like regular users, using password information gathered from highly publicised data breaches. Expecting consumers to maintain strong, non-reused passwords has proven to be ineffective. To protect their brand and customers, the banks and financial institutions must figure out how to detect fraudsters utilising this rising amount of stolen identity data. The good news is that we can now harness the power of behavioural attributes to verify the authentic users. Behavioural analysis serves as a means of understanding how legitimate users truly act without interrupting their experience, thereby predicting and preventing fraud from occurring. Becoming complacent in an age of massive data breaches is both a financial and reputational hazard.”