The Small Business Times

The High Cost of Fraud is Having a Huge Impact on its Victims

Any kind of fraudulent activity can have a serious impact on businesses and consumers, especially since how in 2021, the UK’s cost of fraud surpassed an astonishing £137 billion.  

Businesses suffer direct financial losses, as well as damage to their reputation. Consumers can be left out of pocket, and their personal data may be compromised. Fraud is a serious problem that has far-reaching consequences. It not only affects the victims but also businesses and the economy.

How Fraud Targets Victims

This growth is being driven by advances in technology, which have made it easier for criminals to commit fraud. For example, online scams are becoming more sophisticated, and criminals are taking advantage of the way we shop and bank online.

They are also attractive targets for cybercriminals, as they can use stolen data to commit identity theft or take over customer accounts.

The most common types of fraud were purchase scams and investment scams. In purchase scams, criminals convince victims to buy goods or services that do not exist. In investment scams, victims are persuaded to invest in fake products or schemes.

Data from UK finance revealed that there were 99,733 reported cases of purchase scams, which was the equivalent of 51% for all scams. 

Most criminals will target individuals directly. For example, they may send fake emails or text messages purporting to be from a well-known company, such as a bank or retailer. These messages may contain links to websites that ‌steal personal data, such as login details or financial information.

Criminals may also target people through social media, using fake profiles to a friend or follow their victims. They may then send private messages containing links to malicious websites.

Fraud can also happen in the real world. For example, criminals may pose as charity collectors or doorstep sellers in order to get hold of people’s money or personal data.

The Impact of Fraud

One of the most damaging impacts of fraud is identity theft, where criminals use stolen personal data to apply for financial products in the victim’s name. This can ruin the victim’s credit rating and make it very difficult to get loans, credit cards or mortgages in the future.

Financial loss is another major impact of fraud. This may be as unauthorised transactions on a bank account or being tricked into investing in a fake product or scheme. Sometimes, people have even been scammed out of their life savings.

The psychological impact of fraud should not be underestimated. Most victims report feeling angry, anxious, and upset. Some even experience depression and anxiety. The sense of violation that comes with being a victim of fraud can be very distressing.

Fraudulent activity can also have a knock-on effect on the economy, as businesses lose money and consumers become less confident about spending. This can lead to a decline in economic activity, which can have a negative impact on employment levels.

Who Is Most at Risk?

Fraud affects people of all ages, but it is particularly prevalent among the elderly. This is because older people are often seen as easy targets by criminals. They may be more trusting or have less experience in dealing with scams.

Older people are also more likely to have significant amounts of money saved, which makes them attractive targets for fraudsters. In addition, they may be less aware of the latest scams and how to avoid them.

As more people shop online, the opportunities for fraudsters to commit cybercrime have increased. In fact, online fraud is now the most common type of fraud in the UK.

Staying Alert from Fraud Threats

One of the best things you can do is to stay informed and be aware of the various scams that are circulating. 

  • Never give out personal or financial information to someone you don’t know or trust. This includes your bank account details, credit card number and online login details.
  • If you’re not sure about an email, text message or phone call purporting to be from a company, get in touch with the organisation directly to check. Do not use the contact details provided in the message, as these may be fake.
  • Be wary of unsolicited emails or messages that contain attachments or links. These may be infected with viruses or direct you to a fraudulent website.
  • Never respond to requests for money or personal information, even if the person seems genuine.

If you think you have been a victim of fraud, contact your bank or credit card provider immediately. You should also report it to Action Fraud.