Businesses lost over £1 billion to online crime in the last year

With online crime becoming an increasing threat for businesses, new figures from Get Safe Online and Action Fraud show that from March 2015 – March 2016, a huge total of £1,079,447,765 was reported lost by businesses to online crime. This comes as Action Fraud saw a 22% increase from 30,475 in 2014 – 2015, to 37,070 crimes reported in the last year.

online crime

On average, each police force in the UK recorded £19,626,323 in losses by businesses in their area. However, the true picture could be even higher, as these figures do not take into account the amount potentially lost by those businesses who choose not to report online crime to the police.

From these latest statistics, it’s evident that businesses need to do more to ensure staff across the board have appropriate online fraud awareness training, so that everyone understands their role in keeping the business secure. A substantial amount of attempted fraud against businesses is successful due to lack of knowledge or sloppy habits by their employees.

The online crimes businesses must watch out for

Delving into the figures, Mandate Fraud is becoming an increasingly worrying issue for businesses. This occurs when a fraudster gets victims to change a direct debit or standing order by pretending to be an organisation a victim makes regular payments to, for example a business supplier or subscription service. It’s an extremely targeted approach, and in the last year, has seen a significant 66% increase, with 2323 reported cases, compared to 1403 in 2014 – 2015.

Other types of fraud which have spiralled are CEO Fraud – where an employee is tricked into making a payment by means of an email purporting to be from a senior manager – and extortion, where files on a computer or entire network are rendered inaccessible by ransomware until a release fee is paid.

Corporate employee fraud – where employees or ex-employees obtain property or compensation through fraud, or misuse corporate cards and expenses – is also on the rise, with 1440 cases recorded in 2015 – 2016. Listed in the top ten most reported crimes by businesses in the last 12 months, this demonstrates how fraud is not just an external threat, but can also affect a business from the inside. It is therefore vital for all businesses to provide their staff with the right tools and training to be able to identify signs of fraud or suspicious activity, before it’s too late, as well as having guidelines in place on whistleblowing.

Hacking is perhaps one of the main issues facing businesses. A fraudster can hack into a business’s server, an employee’s personal computer, or access email/ social media accounts to obtain private information. In its various forms, hacking is one of the most widely reported types of fraud in the past 12 months, with 1314 reported cases.

Retail and investment industries also targeted

Other types of fraud committed against specific industry sectors such as retail and insurance also accounted for a substantial proportion of crimes reported by businesses, owing mainly to the typical transaction values involved.

Retail fraud – defined as fraud committed against retailers through refund fraud, label fraud or when goods are ordered with no intention of paying – has risen by 71% from 3559 cases reported in 2014 – 2015, to 8163 cases in the last year. This topped the list as the most reported type of online crime in the past 12 months, accounting for almost a quarter (22%) of the total recorded crimes. A substantial increase in retail fraud reports came between November 2015 to January 2016, possibly connected to the increased spending in retail over the Christmas and winter sale period.

In addition, Insurance Related Fraud showed a marked increase of 68%, from 587 in 2014 – 2015, to 986 cases in the last year.

Most affected areas

In terms of the areas worst affected, Metropolitan and Essex police forces received the largest volume of reports, with 5,742 and 2,505 cases of online crime. This is followed by Thames Valley (1,335), Kent (1,185) and West Midlands (1,158). Furthermore, the Metropolitan Police area had the highest reported loss of £240 million, followed by Essex (£196 million) and Leicestershire (£188 million).

Crimes on the decrease

Although still one of the most widely reported crimes affecting businesses, reports of Cheque, Plastic Card and Online Bank Accounts Fraud (defined as the fraudulent use of a cheque, plastic card or online bank account) decreased by 21% in the last year, moving from the most reported fraud with 7114 reports in 2014 – 2015, to number three in this year’s most reported online crimes (5682 cases).

Additionally, 2015 – 2016 reports of other Advanced Fee Frauds have decreased by 37%, moving out of the top 10 reported crimes. Other Consumer Non Investment Fraud – whereby victims are shown or test a product that isn’t received, is fake, or is stolen – has also decreased by 31%.




Share this