A2013 report on the internet habits of the UK claimed that we spend an average of 43 hours online each month. This will only have increased since, and it now seems that every purchase we make is either researched or bought online.
The principles of an open and free internet have created a level playing field for all, but this goes for criminals as well, who have exploited technology to not only make vast sums of money but also evade law enforcement.
These criminals are organised, with the British Retail Consortium estimating that 59 per cent of retail fraud is committed by organised groups. The technology enables criminal gangs, as well as anyone with an internet connection, to target individuals, businesses or governments without ever having to show their face.
Contrast this with the fraud investigator that has to traverse, decipher and decode multiple cultural and legal systems in an attempt to catch criminals without the traditional tools of CCTV, forensics or crime scene analysis.
Fraud is estimated to cost our economy a total of £30bn, making it far and away the most financially costly crime (without considering the emotional impact). This equates to £500 lost by every citizen in the UK.
Ask a room of people who has been a victim of burglary, and a small percentage will put their hand up. Ask them if they have been the victim of online fraud and nearly all will raise their hand. But how many will report the fraud compared to the burglary? More than half of fraud involves an online element.
While the vast majority of crime has continued to fall over the last 10 years, reported fraud increased by 60 per cent in the five years between 2007/08 and 2013 (according to the British Crime Survey).
This increase is partly down to better reporting and awareness, with the introduction of a national fraud reporting centre, Action Fraud, but it is without doubt that the rise in crime prevalence is real. And it is growing in both financial cost and complexity.
Despite this, the number of fraud investigators has remained the same, with approximately 1,500 across England and Wales. With 850,000 reports to Action Fraud last financial year (2013-14) alone, it is clear that with the current budget constraints policing cannot keep up with the demand.
Individuals, businesses and governments need to do more to protect and prevent online fraud and cybercrime. For example, there is still no legal or regulatory compulsion for businesses, including banks, to report fraud. This is part of the reason why it is estimated that 80 per cent of fraud goes unreported. That’s potentially millions of crimes that face no investigation, and therefore no prosecution and no subsequent intelligence to utilise. It means that fraud investigators are working in the dark. If we can understand the scale and complexities better, then we can help shape the response in terms of investigation and prevention.
Despite the enormity of the task at hand, the UK is in a good position to be at the forefront of tackling cybercrime. Police forces, government and the public and private sector are operating in ever closer alliance, sharing information and resources globally to disrupt and dismantle the networks attempting to exploit the internet for criminal capital.
My officers disrupt 3,000 websites, phone systems and bank accounts a month to help prevent fraud against governments, businesses and individuals. We have estimated that the City of London Police alone is preventing the loss of approximately £500m a year through our disruption and enforcement work. But while some businesses recognise the threat posed by cybercrime, such recognition is not universal or widespread.
Large businesses and institutions are required to report cyber attacks, yet there is still no regulatory standard that could prevent them becoming a victim in the first place. Law-enforcement agencies are becoming increasingly successful at targeting the most serious offenders. However the scale of the challenge is so large that “prevention” (helping businesses and individuals protect themselves) is the only long-term way of combating the escalating threat.
I have been calling for a national campaign to educate all on the risks of cyber enabled fraud. Everyone knows how to protect their home, but few know how to protect themselves from malware or phishing scams. There is a wealth of advice already available, but until we all understand the steps we need to take to stay safe, the dangers will persist.
This means reaching into schools, businesses and individuals’ lives to help them understand the online world in far greater detail.
We already release fraud alerts through the Action Fraud neighbourhood alerts scheme, telling people about the latest scams and how to prevent becoming a victim. Over 200,000 people are signed up and this is growing.
It is by talking directly and plainly to the public, and reacting to emerging threats, that we will be able to empower people to spot fraudsters and prevent crimes that can destroy lives and damage businesses.
Adrian Leppard is the commissioner of the SHUTTERSTOCK City of London police
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