UK urged to lead cross-border war on fraud costing £420bn

The Social Market Foundation (SMF) has called for a united international effort to combat fraud, which has cost the UK economy approximately £16bn between 2021 and 2023. The report highlights that 21% of adults globally have fallen victim to fraud in the past three years, with £168bn lost to fraudsters worldwide. 

Including the wider social costs, the SMF estimated that fraud was costing the global economy £420 billion.

The report also emphasises the responsibility of banks and digital platforms in compensating victims, with 94% of respondents believing banks should bear this duty. The SMF advocates for new legal obligations for companies involved in the fraud chain to prioritise prevention and cover associated costs.

The government has published a strategy to deal with the fraud epidemic, but the SMF urged ministers to co-operate internationally to deal with the problem.

Richard Hyde, Senior Researcher at Social Market Foundation, said “Our research presents the clearest picture yet of the scale of the global fraud problem. It is not just the UK that is besieged by fraudsters – both developed and developing countries face huge fraud challenges.

“Any nation acting alone remains ill-equipped to deal with today’s fraudsters, who can operate from anywhere and claim a victim thousands of miles away. To tackle the challenge, governments across the world need to co-ordinate and put in place strong counter-fraud measures at home; this will create the best platform from which the world can deal with cross-border fraud. We believe that the UK can and should facilitate and lead that global movement”.   

Across the countries polled, there was agreement that digital platforms as well as banks should have a responsibility for compensating fraud victims. According to the survey, 94 per cent of people thought banks had a responsibility to compensate fraud victims, compared to 88 per cent for digital platforms and 84 per cent for telecoms and internet providers.

The report called for new legal duties to be introduced for firms across the fraud chain’ to prioritise fraud prevention and bear relevant costs.

Stephen White, Chief Operating Officer at Santander UK, said “The report puts to paper the sheer scale of the fraudemic that we’re seeing. Despite the best efforts of banks and policymakers, the criminal gangs who sit behind fraud are enriching themselves to the tune of billions and costing the global economy hundreds of billions. Fraud has become a global phenomenon, as such it needs global, collective action. The UK is in a prime position to lead this charge, but we need renewed focus on tackling the fraudemic across Government, banks, and the global technology and communication companies that connect criminals with potential victims.”