Fraud Declines But Consumers Are Still Vulnerable

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Fraud Declines But Consumers Are Still Vulnerable

By Trevor Clawson

The phone rings at 4.00pm on a Friday afternoon. You pick up and find yourself talking to a friendly call centre operative who claims to work for your internet provider. Problems have been detected with your router and the company needs a few details about your connection configuration in order to solve the problem. You are, of course, talking to a fraudster who is seeking to obtain technical information that will allow him (or her) to breach the security on your PC.

That’s just one example of how the simple act of picking up a phone or opening an email can be a hazardous business. Most internet users are all-too-familiar with suspicious looking emails that invite us to click on a link to qualify for a special offer, or inform us that action is required to reactivate a frozen bank account. The aim of these messages is usually to harvest personal information that can be subsequently used to execute frauds.

So here’s the good news. The latest Crime Survey for England and Wales finds that certain types of fraud – including those involving misuse of computers – fell by 15% in 2017 when compared to a year earlier.

Based on interviews with around 51,000 people, the crime survey provides an annual snapshot of crime trends in England Wales, as experienced by the general public. This year’s crime survey found that although violent crime was on the rise, the overall figures were falling. The decline in fraud and computer misuse reflected this bigger picture.

Fraud is Still A Problem

But that doesn’t mean that Britons should be relaxing their vigilance. Back in 2016, fraud and computer misuse accounted for around half of crimes against individuals, with the Crime Survey statistics suggesting there could have been as many as 5.4 million incidents. So while the decline recorded this year is to be welcomed, it has to be remembered that the numbers are coming down from a high level. Consumers are still vulnerable.

Crime Survey Reveals Fraud Declines but Consumers Still Vulnerable

Fraud can be hard to spot, not least because the criminals use a wide spectrum of techniques and strategies. In some cases, fraudsters use technology – such as malicious software that is downloaded when an email recipient clicks on a link – to steal personal and bank details. But many frauds are relatively low tech and rely on the age-old techniques of the confidence trickster. For instance, a victim might receive a phone call, apparently from a bank, saying that due to a technical problem money, must be transferred from one account to another. The trick from the fraudsters point of view is to sound plausible. Or in the online arena, a student might be asked to pay money up front to secure an interview with a non-existent employer, supposedly arranged by a ‘recruitment’ site. More basically, a consumer may key in credit card details to secure a ‘bargain’ that will never be delivered.

Charged Emotions

The question is, why are such scams still effective? According to research published today (January 13) by banking group, NatWest, we all remain vulnerable because criminals have become skilled at exploiting human emotions.

To demonstrate how easily people can be persuaded to hand over personal information, NatWest staged a YouTube dating game hosted by TV presenter Laura Whitmore. During the course of the game, the actors asked a series of questions designed to encourage the other participants to reveal personal information. These included the online security check favourite: “What was the name of your first pet.”

“I was amazed to see how many daters gave away what could be considered trivial pieces of information, with a minimal amount of coaxing. It definitely brought home how important it is to stop and think before sharing personal information with anyone,” says Whitmore.

As NatWest sees it, similar manipulative techniques are being used online in emotionally charged situations. A case in point is the romance scam, in which fraudsters connect with potential victims via email or through dating sites. Over time, the criminal plays on the desire of the victim while also building trust. Once that trust has been established the next stage of the scam sees the fraudster asking for personal details or requesting money.

Excitement can also play a role in persuading a potential victim to part with information or cash. For instance, NatWest cites the example of too-good-to-be-true holiday offers. In the excitement of booking a bargain holiday, a consumer will often set aside any caution or natural wariness.

Fear can also play a role. One increasingly common criminal strategy is to send a member of staff an ‘urgent’ email – apparently from a senior manager – requesting that funds are transferred immediately to a third party account. Fearing the wrath of the manager, the employee may make the cash transfer without carrying out any checks. The same principle can be applied to extracting money or information from consumers by sending emails claiming that a bill requires immediate payment or that a bank account will be frozen unless action is taken.

Jane Howard, Managing Director of Personal Banking at NatWest warns that no one should underestimate the power of the techniques used by fraudsters.

“In order to protect yourself from falling victim to a scam, people should remain vigilant when browsing online or receiving an out of the blue phone call. Take Five  and don’t act straight away. Listen to your instincts and don’t be pressured into making a payment,” she says.

The Bigger Picture

Crime Survey Reveals Fraud Declines but Consumers Still Vulnerable

There is a bigger picture. While fewer people are experiencing fraud more reports are being lodged with the law enforcement authorities.

Published in parallel with the National Crime Survey, an Office for National Statistics report says there was a 7% rise in fraud reported to the Police and the Action Fraud Hotline. In particular, there was a rise in so-called bank and credit industry fraud. Much of this revolves around applications for credit using stolen personal details.

At one level, this is essentially a crime against businesses offering credit, such as banks, mobile phone companies or hire-purchase agreement providers. and is distinct from fraud committed against individuals.

However, individuals are indirectly affected.Having personal details involved in an application fraud can have a detrimental impact on that individuals own credit score. Equally important, the personal details used in application frauds may well have been stolen via an email or call centre scam.

Research by credit checking agency Experian suggests that fraud costs the UK economy £193bn a year. It remains a major problem.

By | 2018-02-14T11:18:00+00:00 February 14th, 2018|Personal Finance, Technology|0 Comments

About the Author:

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Trevor is a UK-based business journalist and author, specialising in startups, tech companies and fast growth businesses. His career in journalism began as Business Editor of BBC World television's pan-European text news services. From there he went on to edit e.Business and PLC Director magazines before going freelance. He is the author of three books, including The Unauthorized Guide to Business the Jamie Oliver Way, which has been translated into five languages. Follow Trevor on Twitter @trevorclawson

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