11. What is happening to trends in fraud?

This section focuses on the latest findings and available trends gathered from three main sources of data on fraud:

incidents of fraud reported to the Crime Survey for England and Wales (CSEW), including both the existing plastic card fraud series and newly introduced questions on fraud and computer misuse

police recorded fraud referred to the National Fraud Intelligence Bureau (NFIB) by Action Fraud (the national fraud and cybercrime reporting centre) as well as two industry bodies, Cifas and Financial Fraud Action UK (FFA UK)

additional data collected by FFA UK on a broader range of bank account and plastic card frauds than those referred to the NFIB, using a system referred to as CAMIS1

In interpreting these data it is important to bear in mind that each source varies in its coverage. CSEW estimates encompass a broad range of fraud offences, including attempts as well as completed ones involving a loss. The number of incidents of fraud estimated by the CSEW is substantially higher than the number of incidents referred to the NFIB, as the survey is able to capture a large volume of lower-harm cases that are less likely to have been reported to the police.

In contrast, incidents of fraud referred to the NFIB by Action Fraud, Cifas and FFA UK will tend to be focused on cases at the more serious end of the spectrum, as by definition they will only include incidents that the victim considers serious enough to report to the police or where there are viable lines of investigation. As a result, police recorded fraud offences make up a relatively small proportion of the overall volume of fraud. The CSEW suggests that only 17% of victims of fraud who are resident in households report to the police or Action Fraud.

However, additional administrative data from FFA UK on bank account and plastic card frauds (sourced from their CAMIS system) is able to give us a fuller picture of the extent of fraud that has been identified by financial institutions. These data help us to bridge the gap between the broad coverage provided by the CSEW and the narrow focus of offences referred to the NFIB. Most of the additional offences covered in the CAMIS data fall into the category of “remote purchase fraud”2 and lost or stolen cards, which account for a high proportion of plastic card fraud that is excluded from the NFIB figures.

It is not yet possible to analyse trends in fraud from the new elements of the CSEW as we do not have 2 full years of data. However, the available evidence from other sources suggests a general rise in the level of fraud in the last year in England and Wales3. In particular, rising trends were evident in the existing estimates of plastic card fraud from the CSEW and in CAMIS data from FFA UK.

Each of the three sources will now be discussed in turn. Further information on these sources and the differences between them can be found in Section 5.4 of the User Guide and also in the Overview of fraud statistics, year ending March 2016 article.

Crime Survey for England and Wales

New questions on fraud and computer misuse were introduced to half of the CSEW sample from October 2015 and are published as Experimental Statistics4. Fraud and computer misuse estimates have been incorporated within headline CSEW estimates since the year ending September 2016, when a full year’s data had been collected.

Adults aged 16 and over experienced an estimated 3.4 million incidents of fraud in the survey year ending March 2017 (Table 4), with over half of these (57%; 1.9 million incidents) being cyber-related5 (Table E8).

“Bank and credit account” fraud was the most common type of fraud experienced (2.5 million incidents; 74% of total fraud), followed by “non-investment” fraud – such as fraud related to online shopping or fraudulent computer service calls (0.7 million incidents; 22% of total fraud).

In addition, adults experienced an estimated 1.8 million computer misuse incidents; around two-thirds (66%; 1.2 million incidents) of these were computer virus-related and around one-third (34%; 0.6 million incidents) were related to unauthorised access to personal information (including hacking).

Table 4: Crime Survey for England and Wales fraud and computer misuse - numbers of incidents for year ending March 2017 (Experimental Statistics)1,2 England and Wales Adults aged 16 and over Offence group Number of incidents (thousands) Fraud 3,370 Bank and credit account fraud 2,489 Non-investment fraud 737 Advance fee fraud 76 Other fraud 68 Computer misuse 1,795 Computer virus 1,193 Unauthorised access to personal information (including hacking) 603 Unweighted base - number of adults 17,171 Source: Crime Survey for England and Wales, Office for National Statistics 1. Experimental Statistics are those which are in the testing phase and not yet fully developed. They are published in order to involve users and stakeholders in their development, and as a means to build in quality at an early stage. 2. New victimisation questions on fraud and computer misuse were incorporated into the CSEW from October 2015. The questions are currently asked of half the survey sample to test for detrimental effects on the survey as a whole and help to ensure that the historical time series is protected. Download this table Table 4: Crime Survey for England and Wales fraud and computer misuse - numbers of incidents for year ending March 2017 (Experimental Statistics)^1,2^ .xls

Further findings from the CSEW fraud and computer misuse questions for the year ending March 2017 are presented in Tables E1 to E106. In particular:

there was typically less variation for fraud than other types of crime in the rate of victimisation across different groups in society, although some personal and household characteristics were associated with being a victim of fraud, for example, those in higher income households and individuals in managerial and professional occupations; this differs from other crime types such as violence and property crimes 7 (Experimental tables E3 and E4) 8

the large majority of victims of fraud had been a victim only once (86%), with repeat victimisation (within the same 12-month crime reference period) more common among victims of bank and credit account fraud (15%) than non-investment fraud (5%) (Experimental table E5)

almost three-quarters of fraud incidents involved initial loss of money or goods to the victim (73%), independent of any reimbursement received 9 . This equates to an estimated 2.4 million offences, compared with 0.9 million incidents of fraud involving no loss (Experimental table E1)

where money was taken or stolen from the victim, in just under two-thirds of incidents the victim lost less than £250 (63%, Experimental table E2)

incidents of bank and credit account fraud were more likely to result in initial loss to the victim (78%, 1.9 million incidents) than other types of fraud; in the majority of these incidents, the victim received a full reimbursement (84%), typically from their financial services provider

the extent of cyber crime10 varied by type of offence, with over three-quarters of non-investment frauds indicated by victims to have involved the use of the internet in some way (80%), compared with half of all bank and credit account frauds (50%, Experimental table E8)

Questions on plastic card (bank and credit card) fraud have been included in a supplementary module of the CSEW since 2005 but do not collect enough detail to be added to the main crime estimates11,12. The results from this supplementary module showed a statistically significant increase of one percentage point in the proportion of plastic card owners who were victims of card fraud in the latest year, increasing to 5.7% in the survey year ending March 2017 (Figure 6).

This follows a relatively stable trend in levels of plastic card fraud measured by this module over the last few years, although it is still lower than the 2009 and 2010 peaks. The significant rise recorded by this module is consistent with rises in data referred by Cifas and by other industry data from the FFA UK CAMIS system. More information is available in the “Recorded fraud offences” section.

Figure 6: Proportion of Crime Survey for England and Wales plastic card users who had been a victim of plastic card fraud in the last year, year ending March 2006 to year ending March 2017 Source: Crime Survey for England and Wales, Office for National Statistics Notes: The data in this table refer to crimes experienced in the 12 months before interview, based on interviews carried out in that year. Download this chart Figure 6: Proportion of Crime Survey for England and Wales plastic card users who had been a victim of plastic card fraud in the last year, year ending March 2006 to year ending March 2017 Image .csv .xls

New Experimental Statistics on bank and credit account fraud indicate that these types of offence comprise just under three-quarters (74%) of the new fraud estimate. With this in mind, in the absence of a back series from the new questions, the trends in plastic card fraud from the existing supplementary module give an indication of recent trends in fraud.

Recorded fraud offences

The police recorded crime series incorporates fraud offences collated by the NFIB from Action Fraud, Cifas and FFA UK13. In the latest year, there was a 5% increase in the number of fraud offences recorded in England and Wales (up to 649,77014 offences) compared with the previous year, and this continues the year-on-year increases seen over the last 5 years (Tables F18a and 18b).

This latest increase was largely owing to offences reported to Action Fraud, which rose by 20% (up to 264,056) as well as offences referred by Cifas, which increased by 2% (up to 306,195). FFA UK reported reduced figures for the year ending March 2017 due to a problem uploading data to the NFIB system for the period January to March 201715.

In July 2015, the company that was contracted to provide the Action Fraud call centre service went into administration, following which Action Fraud recorded lower than normal monthly volumes of fraud offences between July 2015 and April 201616. As volumes have recovered in recent months and because the lower-volume months now form part of the comparator year (year ending March 2016), the latest 20% rise will have been influenced by the changes in the operation of the Action Fraud call centre and thus figures should be interpreted with caution. We expect the effect on the Action Fraud data will continue over the next few quarters.

The number of fraud offences recorded by Action Fraud (and the police17) for the year ending March 2017 is more than double the number recorded in the year ending March 2012, a rise of approximately 145,000 incidents (Table F18a). Likewise, Cifas have seen a 30% increase in recorded incidents of fraud compared with 5 years ago (a rise of approximately 71,000 incidents). In contrast, FFA UK data indicate more year-on-year fluctuation in their recorded incidents, but show an 18% decrease between the years ending March 2012 and March 201615.

One of the largest increases in the separate categories of fraud referred to the NFIB in the latest year was seen in “banking and credit industry” fraud (up 3% to 377,012 offences). This was caused by the volume increase in offences reported to the NFIB by Cifas (up 9% to 264,583 offences) and Action Fraud (up 29% to 32,914 offences). This was largely driven by an increase in application fraud, for example, opening up an account using the identity of an innocent party, usually in relation to hire purchase agreements or loans18. Other notable increases compared with the previous year were also seen for:

“non-investment fraud” (increased by 16%, equivalent to 14,762 offences)

“advance fee payment” fraud (increased by 34%, equivalent to 11,385 offences)

“computer misuse crime” (increased by 48%, equivalent to 6,327 offences)

These categories of fraud are only referred to the NFIB by Action Fraud.

Several major categories of fraud continued to fall in the latest year, for example:

“telecom industry fraud (misuse of contracts 19 )” fell by 26% (equivalent to 12,256 offences), continuing the downward trend seen in the previous quarter, with the decrease largely accounted for by a fall in these types of offences reported by Cifas

“insurance fraud” fell by 20% (equivalent to 2,158 offences) following a period of increase, due largely to a decrease in the number of such offences reported by Cifas, although it is too early to say at this stage if this reflects a genuine reduction

“financial investments” fraud fell by 22% (equivalent to 1,198 offences)

A full breakdown of the types of fraud offences referred to the NFIB by Action Fraud, Cifas and FFA UK in the latest year is presented in Table A5.

A police force area breakdown of Action Fraud data based on where the individual victim resides, or in the cases of businesses, where the business is located, has now been produced, available from the year ending March 2016 only20 (Experimental Statistics, Table E11). In contrast with most other crimes, the latest data show there was generally less variation in rates of fraud by police force area, although rates for forces in southern England were slightly higher than those among forces in Wales or northern England.

Additional administrative data on card and bank account fraud

In the latest year, FFA UK reported 1.9 million cases of frauds on UK-issued cards, cheque fraud and remote banking fraud via their CAMIS system21, an increase of 11% from the previous year (Table F20).

Importantly, trends can differ between the FFA UK data collected via CAMIS and the FFA UK data referred to the NFIB. This is partly because the cases referred to the NFIB are a subset of the CAMIS data and include only those with intelligence value to the police. As a result, they are less likely to include incidences of “remote purchase” fraud, which was one of the main drivers in the overall increase in FFA UK data from CAMIS.

The FFA UK publication Fraud the Facts 2017 concluded that “impersonation and deception scams, as well as digital attacks, continue to be the primary factor behind fraud losses22.”

In general, the FFA UK CAMIS figures have been consistent with those shown by the CSEW trend in plastic card fraud, with levels peaking around 2008 to 2010, followed by falls in subsequent years that were thought to be related to the introduction of chip and pin technology.

For more information on the differences between the main sources of fraud and their strengths and limitations, please see the Overview of fraud statistics, year ending March 2016 article.

Notes for: What is happening to trends in fraud?