Holborn Assets Industry Watch – UK fraud by impersonation up 45%

Posted on: 29th May 2017 in Holborn Assets

Things move fast in the world of scams. Holborn Assets Scam Watch recently had a good look at detailed scam statistics for the UK, from fraud experts Cifas. And now this month Cifas has published a revealing new report:

• Total of all UK fraud cases up just over 1% – from roughly 321k in 2015 to 325k in 2016.
• A key type of carrying out identity fraud by impersonation is on the increase. Incidents of “facility takeover” rose by 45% from roughly 15.5k in 2015 to 22.5k in 2016. During facility takeover, a fraudster poses as the victim and gains control over an account of some kind (bank, email, credit card, phone etc).
• 88% of identity fraud took place on the internet – in comparison to only 30% of facility takeovers online (50% of facility takeovers are carried out over the phone).
• Identity fraud remains the most popular fraud – claiming 60% of recorded cases. A rough comparison with FCA figures for company-related fraud suggests that you are over 30 times more likely to be hit by identity fraud than investment or pension fraud.
• Despite all the focus on the internet and the telephone as tools of fraud, Cifas reports that “the most common internal fraud was simply staff stealing cash.”

And key fraud figure Commander Dave Clark of the City of London Police force seemed to suggest that the reality of fraud was far worse than the figures suggest. The National Co-ordinator for Economic Crime said: ““Whilst national reporting of fraud and cyber crime has some way to go in representing the true scale and threat to our citizens and businesses in the UK, I welcome the stark reality that Cifas’ Fraudscape figures show from their member organisations.”

Five UK Fraudsters jailed for 14 years

70 victims of a £1.7m investment scam may be pleased to learn that 5 scamsters have been given a total of 14 years in prison after an investigation by the London Metropolitan Police into rip-off merchants Taylor & Mills Ltd. ActionFraud reports that, “employees of the company were cold-calling the elderly and vulnerable, using aggressive sales tactics, to persuade them to buy green investments known as ‘carbon credits’.” The police found that investors’ money ended up in bank accounts registered to the scam company rather than in carbon credits. There were 3 clear scam warning signs on display here by the scamsters:

• They cold-called. Although not all cold calls from companies are scams (obviously), cold-calling is used to introduce six out of ten investment scams; it is the favourite method of approach because both urgency and emotion can be injected into the business proposition (that’s why legitimate companies do it too!). So if you are cold-called, be alert. But you would be anyway, right?
• They used “professional-looking brochures” which cleverly used a quotation from Barack Obama to endorse the investment offer. If a brochure looks professional, how can you tell whether it is legitimate or not? Well, surely you can’t? This is one scam warning sign that is not always helpful – but creating an association with a living US president is a little presumptuous and therefore suspicious, even if Obama is endorsing carbon credits per se, rather than the fraudulent company.
• They promised guaranteed unrealistic returns. One call recorded shows that a fraudster promised to triple an investment in 4 months. That’s a 300% return in a third of a year. A legitimate company is more likely to be offering no more than a 10% return in a whole year – and then, critically, they won’t be making any guarantees!

Statistics, statistics

One set of fraud stats is suggesting that Brits have no idea about fraud – and another poll is suggesting that, if anything, we are ridiculously over-confident. ActionFraud reports that, “new research, commissioned as part of the FCA’s ScamSmart campaign, reveals that only 42% of people think they know how to spot a fraudulent investment opportunity.” The Citizens Advice Bureau found, on the other hand, in 2016 that ¾ of people were confident that they could, from a choice of 3, pick out the honest investment advertisement from two wrong-uns – and almost 90% got it wrong!