Digital fraud, also known as cyber fraud or online fraud, refers to any type of fraudulent activity that takes place in the digital space.
This can include fraudulent transactions, identity theft, phishing scams and more.
Digital fraud is a growing problem that affects individuals, businesses and organisations of all sizes.
According to the Crime Survey for England and Wales (CSEW), the percentage of fraud incidents that were cyber-related rose from 53 per cent in the year ending March 2020 to an estimated 61 per cent in the year ending March 2022.
Types of digital fraud
Digital fraud can take many different forms and some of the most common types of digital fraud include:
Identity theft – This occurs when a fraudster steals personal information, such as passport details or credit card information, in order to open fraudulent accounts or make purchases online.
Phishing scams – This involves a fraudster posing as a reputable entity such as a government agency or a bank and aims to trick the victim into divulging sensitive information.
Business email compromise – This is a type of phishing attack where a criminal attempts to trick businesses and senior members of staff into making fraudulent payments or wire transfers, or into revealing sensitive information.
Malware and ransomware – This involves the installation of malicious software on a victim’s computer or digital device. The fraudsters are then able to steal data or demand payment to restore access to the device.
In the news
A fraudster was able to seize control of a bank account belonging to a care home in Somerset. The scammer proceeded to carry out numerous transactions over a two-day period, ultimately defrauding the home of £1.6 million.
This incident is not the first of its kind, as another care home lost more than a million pounds to scammers.
In both cases, the care homes had Barclays bank accounts and Barclays were aware of the suspicious activity but did not prevent the transactions from taking place.
Regarding the care home in Somerset, the fraudsters used a new tactic and persuaded the victim to download software that permits them access to their computer and therefore their online banking, known as remote banking fraud.
The scammer claimed to be from Barclays bank and told the home manager suspicious activity was taking place and he needed to check some details.
The home manager was convinced of the man’s authenticity as the caller had knowledge of previous transactions.
The suspicious transactions were identified by Barclays and the genuine bank attempted to call the manager but were unable to get through. Despite this, the bank still did not block the transactions.
Digital fraud is a serious threat that requires vigilance and proactive measures to prevent it from happening. Staying informed and protecting personal information can help safeguard yourself and your business from the damaging effects of digital fraud.
Support from accountants is important as they can help identify fraud through the services provided to businesses, such as accounts preparation, bookkeeping and audits.
Accountants are trained to identify fraud and know what to look out for.
Need help in preventing fraudulent attacks on your business through careful monitoring and advice? Contact our team today.