Author: Nicola Sharp
28 March 2023
2 min read
The year 2023 is not ushering in a whole new era for fraud. But certain issues will continue to be notable, while others may be set to become increasingly significant.
In the UK, the fraud epidemic of recent years shows no signs of reducing. Those looking to commit fraud are, as ever, looking for ever more inventive ways to make illegal gains.
The problem of authorised push payment (APP) fraud - where a person is tricked into making authorised bank transfers to someone else – continues to grow. Research showed that it increased by 30% from the first half of 2021 to the first half of 2022
Such a rise is likely to continue as the cost of living crisis prompts more people to look to make illegal gains and makes others more vulnerable to promises of quick, easy returns offered by fraudulent investment schemes.
Losses individuals suffer due to romance scams or being conned into buying what they believe are genuine goods will continue to account for a large proportion of APP. The difficult financial times are also likely to lead to more mortgage, credit, and loan fraud over the next 12 months.
The cryptocurrency sector and fraudulent investment schemes linked to it continue to flourish. Recent years have seen a number of major new stories relating to the collapse of cryptocurrency exchanges being accompanied by fraud investigations, with the demise of FTX being the largest recent example. It would be a surprise if FTX was to be the last major collapse of a crypto sector company.
As interest in cryptocurrency continues to grow, this is likely to be reflected in a similar increase in crypto-related fraud during this and future years. Research from Experian showed that losses related to cryptocurrency scams increased by approximately 50% in a recent 12-month period, and this figure is expected to rise by 30% to 40% during 2023.
A lack of regulation and the apparent anonymity involved in many crypto transactions make it attractive for those looking to carry out Ponzi schemes and other investment opportunities; with fake initial coin offerings (ICOs) an increasingly common fraud tactic.
The fact that fraudsters have access to a wide variety of personally identifiable information (PII) is making it easier for them to target individuals in a number of different ways.
Everything from using information that individuals have publicised about themselves via social media to buying stolen data from the dark web is giving those who commit fraud various means to target individuals, companies and other organisations.
If previous years are anything to go by, 2023 will see a rise in ransomware attacks. Ransomware involves the use of a type of malicious software to encrypt a victim's data before demanding a ransom to restore things back to normal.
The United States Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has stated that the number of suspicious activity reports being made about ransomware has almost tripled in a year. There is little reason not to expect this upward trend to continue.
Phishing attacks are likely to remain a major tool for those looking to make fraudulent gains either by tricking people into revealing sensitive information or by using malicious software to obtain what they want.
There is also little chance of a decrease in synthetic identity fraud, where the fraudster creates a fake identity using a mix of real and fake personal information to make gains through activities such as applying for credit, opening bank accounts and purchasing high-value items.
Nicola is known for her fraud, civil recovery, arbitration and business crime expertise, her experience of leading the largest financial disputes and multinational investigations and her skills in devising preventative measures and conducting internal investigations for corporates.