Millions of Brits have fallen victim to fraud over the past three years, costing the wider economy an estimated £16bn ($21bn), according to a new study sponsored by Santander UK.
The banking giant enlisted the help of cross-party think tank the Social Market Foundation (SMF) to poll 28,000 respondents across 15 European countries, to better understand the impact of fraud – most of which happens online today.
It revealed that a fifth (21%) of respondents experienced fraud between 2021 and 2023, at a direct cost of £168bn.
However, the SMF estimated the total cost of such incidents at £420bn. This includes productivity losses from having to spend time reporting and recovering from the fraud incident.
In the UK, the average loss per victim was £907, putting the total direct cost at around £9bn.
Read more on fraud: Authorized Push Payment Fraud Cases Surge 12% Annually
Although most (94%) respondents argued that banks and other payment services providers should take a lead in compensating victims, a majority also cited digital platforms (88%) and telecoms and internet providers (84%) as having a similar responsibility.
It’s an argument often made by the banking sector. In February, Revolut released research claiming that 60% of fraud reported to it in 2023 originated on Meta-owned platforms such as Instagram – the majority of which were investment scams.
The UK is Asked to Take a Lead
Both the SMF and Santander called upon the British government to lead a globally united effort to crack down on fraudsters.
“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,” said SMF senior researcher Richard Hyde.
“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 coordinate 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.”
Specifically, the SMF wants the new Labour government to:
- Lobby for a comprehensive international agreement which will commit signatories to prioritizing and investing more resources into tackling fraud
- Establish a cross-departmental Economic Crime Leadership Group
- Enhance the law enforcement response to economic crime
- Align the interests of private sector companies that comprise the “fraud chain,” by legally obliging them to prioritize fraud prevention and bear relevant costs
- Ensure that the “Stop! Think Fraud” public awareness campaign has long-term funding to run for the next five years
- Increase support for strengthening anti-fraud law enforcement and regulatory capabilities in low and middle-income countries