Fraud is the most commonly experienced crime in the UK, affecting UK society economically and socially. It accounts for over 40% of crime in England and Wales.

According to the Office of National Statistics, it was the most common crime type between April 2022-March 2023, with an estimated 3.5 million incidents of fraud experienced by adults aged 16 and over.

Both a firm and its customers can be victims of fraud this is because fraud can be carried out either:

• 1^st Party – When an individual or an organisation purposely misrepresents their identity or provides incorrect information to gain an unfair or unlawful advantage i.e. to access credit products or terms, they would not otherwise be eligible for.
• 3^rd Party – Where an individual’s identity or personal details are used without their consent or knowledge, to gain credit.

Note: whilst less common, If a customer is found to have knowingly provided their information to a third party with the intention of that person committing fraud this is known as 2^nd party fraud and as such the customer would be committing an offence.

The most common instances of fraud affecting customers are:

• Identity theft
• Account takeover
• Phising, vishing and smishing
• Bogus Debt
• Invoice redirection
• Advance fee fraud

How this may operate in practice

An important element to fraud prevention is also helping customers to identify and respond to fraud and the FCA is keen to see firms take proactive steps to help to educate their customers on fraud risks and provide suitable support to customers who fall victim to fraud, which connects to the firms obligation to deliver good outcomes for customers particularly in helping consumers avoid foreseeable harm.

Firms are encouraged to publish educational guidance to customers to help them to avoid falling victim to fraud such as:

• Protecting passwords, PIN’s and passcodes
• Scam awareness – protecting personal and payment details
• Managing trusted devices and on-line security
• Taking time to stop and think before parting with personal information or money
• Where to access further guidance on fraud prevention such as ‘Take Five’ takefive-stopfraud.org.uk

It is also important that firms:

• Advise customers how to raise fraud concerns or dispute a fraudulent transaction
• Provide a real time human interface to deal with security or fraud concerns
• Train staff on how to deal with customer enquiries relating to fraud or how to refer to insurers or finance providers who may have specialist fraud teams
• Proactively contact customers who may be at risk of a fraud event or where personal data has been compromised
• Ensure customers know how to report fraud to ‘Action Fraud’ actionfraud.police.uk

Firms may wish to consider publishing FAQ’s on their website, issuing guidance in factsheets or with customer correspondence or having a dedicated staff who are trained to assist customers with fraud concerns. Firms may also signpost to any specialist support available from insurers in this regard.

The FCA have published responses from a number of banking institutions relating to what firms can do to educate their customers which can accessed here.