Fraud continues to be a significant and growing issue across all sectors in the UK, with stats showing that hundreds of millions are being lost every year; unfortunately, the public sector is far from an outlier to this trend. What can technology do?
New statistics from UK Finance show that criminals have stolen over £580 million through unauthorised and authorised fraud – for example, authorised push payment scams, where criminals trick people into handing over money.
Identified fraud in government expenditure increased by almost four times from £5.5 billion in the two years prior to the pandemic, to £21 billion in the two years after, according to the National Audit Office. The NAO also stated that “outside of tax and welfare, most departments have little counter-fraud capability and cannot demonstrate that this is proportionate to the level of fraud they face.”
Risks facing the public
While central government is a lucrative target for fraudsters, the increase in fraud is also felt by local authorities, who have less budget to counteract it. Sadly, as is often the case, it’s vulnerable people who suffer most. According to Office of National Statistics figures, adults who have a disability are more likely to be a victim of fraud compared to those who don’t (9.1% versus 7.4%).
According to our own research, more than three-quarters (76%) of the UK public are fearful of becoming victims of fraud in the future, and 90% believe that organisations, including public bodies, should do more to protect them from fraud.
Digitalisation can help in the battle against fraudsters, and yet also provide new avenues for criminals to exploit, making anti-fraud measures a key aspect to consider. With the switchover from analogue landlines to digital soon to commence, there are concerns the move will create opportunities for scammers. Criminals could target the often older and vulnerable people who rely on them for communication and healthcare telephony devices.
Tackling the risk
One of the most powerful tools in the battle against fraudsters is awareness. It is reassuring to see some councils working both reactively and proactively to warn vulnerable residents of scams via public awareness campaigns and installing call blockers.
Similarly, our recent consumer fraud report found a high public willingness to engage with technology to assist in the fight against fraud. Just under three-quarters said they would agree to more delays and checks in transactions in return for better fraud protection, and around 7 in 10 are willing to share personal data with service providers on the basis they can use this information to better protect them against fraud.
Data analytics can then help to build a more complete picture of what’s really happening, beyond simply transactions and amounts. We have seen with the false allegations made against many sub-postmasters that auditing alone can reveal what might appear to be false accounting when, in fact, there are other factors involved.
New technologies, such as artificial intelligence allow more complex and believable scams to be carried out. However, it’s important that public sector organisations can stay one step ahead and use this technology themselves to counter these crimes. It’s imperative that a combination of technology and increased public awareness and education help minimise the opportunity for fraudsters to take advantage of citizens, especially the vulnerable.
This piece was written and provided by Colin Gray, Principal Fraud Consultant at SAS UK
