There has been a 57 per cent rise in the number of ‘account takeover’ cases this year; where digital scammers have used emails, smartphone apps and texts to obtain personal data and take over people’s credit card accounts. The research, which was conducted by KPMG in their latest Fraud Barometer, also noted an increase in the number of fraud cases where the commercialisation of internet crimes has been a factor, with criminals advertising their services on the ‘dark web’.
Victims of internet fraud, who were reported as being mostly elderly people, have been panicked into contacting fraudsters after messages informed them their computers had been infected. However, after following instructions to contact a free number, scammers have been able to access the victims’ banking details.
KPMG UK head of investigations, Roy Waligora, commented on the latest findings:
“As our digital footprints get larger, cybercriminals will continue to develop new and innovative ways to steal personal data. If we are not alive to the threats, there is a great risk that we increase our vulnerability to criminals through our inaction.”
More findings were released by the Federation of Small Businesses (FSB) this month, reporting that one in five small businesses were the victim of a cyber-attack in the two years to January 2019, with an average of 9,741 incidents reported on a daily basis. Phishing attempts were the most commonly reported type of cyber-attack over the past two years, affecting 530,000 small firms in Britain.
The Cyber Attacks (Asset-Freezing) Regulations 2019 came into force as of June this year, requiring banks to repay customers funds that are stolen as a result of an account takeover attack. The legislation means HM Treasury ministers have the power to freeze assets of and persons or entities suspected of carrying out a cyber-crime, even those which occur out with the UK. Additionally, the 2019 regulations allow HM Treasury to restrict business interactions of UK nationals or UK-incorporated entities with anyone who is suspected of cyber-related fraud.
For a conviction to be lodged, HM Treasury only needs to suspect or have reasonable cause that a person or entity has committed a cybercrime, or is thought to have supported a cybercriminal. While Mr Waligora believes ‘this is a positive step, we all need to remain vigilant’.
The Fraud Barometer, which records fraud cases coming to UK courts with a value of £100,00 or more, found that serious fraud cases are continuing to decline across Scotland. From January-June of this year, £1.2 million worth of fraud cases appeared in the courts; a drop of £600,000 from 2018.
In the first six months of 2019, four cases were heard in Glasgow, Edinburgh and Paisley – with charges including benefit fraud, embezzlement, and VAT fraud. This was five cases less than was heard in Scotland during the same period the previous year.
One of the most high-profile fraud cases during 2019 involved the former carers of Margaret Fleming who fraudulently claimed £182,000 in benefits by pretending Ms Fleming was alive. Another case included Ian Brash, from East Lothian, who stole over £350,000 from the Dr Robert Malcolm Trust while he was a trustee of the charity.
Across the UK, there were 217 alleged fraud cases taken to the courts, a drop of 13 per cent (or 32 cases) from last year. The UK courts have dealt with over £319 million worth of alleged fraud in the first half of this year, £26 million down from the same period in 2018 (£345 million).
The report confirms there has also been a trend of repeat offenders in 2019, recording four cases of people with previous convictions of fraud who returned to court under new charges which totalled £2.6 million. Some of the alleged repeat offenders were able to find employment in new roles where they had internal control to continue to commit fraud. In one particular case, HM Revenue and Customs investigators discovered a tax fraud offender who was raising money to pay the debt of a first scam through a second scam, stealing over £580,000 from other businesses.
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