Five key takeaways from the UK Government fraud report

Five key takeaways from the UK Government fraud report

The growing threat of online fraud, a report recently published by the UK Government, analyses the increasing cost of fraudulent activity in the UK. The report explains why online fraud is becoming increasingly prevalent in the UK, and how retailers, merchants and banks should look to collaboratively tackle the issue as an industry. 

If you don’t have time to sift through the findings - and we don’t blame you - here are our five key takeaways from the report. 

Advanced use of technology

While the report states that the growth and advances of technology have created vast opportunities for innovation and economic growth, the government agrees that these advances have also fostered more opportunities for online crime. 

Nowadays, more than half of fraud (53%) is reportedly committed online and is becoming a growing threat. Online fraudsters can target a myriad of consumers at the same time, disrupt secure platforms, and access sensitive information. 

Card not present fraud increasing

For businesses processing an incredible volume of transactions, it can be difficult to manage between real customers and fraudulent ones. The report states that fraudsters using stolen card details to make fraudulent transactions has increased by 103% between 2011 and 2016, from 709,000 to approximately 1.4 million incidents.

According to an MRC study, the two most commonly used methods for authenticating online transactions are card verification numbers (CVN) and negative lists (also known as blacklists). 

The report states that in order to decrease the number of fraud happening with CNP, merchants should implement additional security measures that will assist in filtering through fraudulent activity.  The most common cases for additional authentication is 3DS and device fingerprinting. 

Collaboration between players 

We’ve heard the term  “collaboration is key” several times before - and it turns out, when it comes to preventing fraud, collaboration really is key. Working collectively and closely as an industry can assist in solving issues quicker, reduce rates and stop fraudsters in their tracks. 


The reports adds that banks do not accept enough responsibility for preventing online fraud, and that there is not sufficient data to support or measure levels of activity. A recommendation pointed out by the government is that The Department should set out minimum standards for banks to report to the government on their performance. 

The report adds: “besides more transparency from the banks, there is also scope for more help from banks for vulnerable people, such as putting restrictions on their bank accounts so they are not at risk of losing huge amounts of money.”

The cost of crime

The report states:

“The cost of the crime is estimated at £10 billion, with around 2 million cyber-related fraud incidents last year, however the true extent of the problem remains unknown. Only around 20% of fraud is actually reported to police, with the emotional impact of the crime leaving many victims reluctant to come forward.”

While the cost of crime is incredibly high, the government proposes that with better collaboration and use of technology and information, the industry can reduce card fraud and return money to customers. The report also proposes establishing minimum technical standards for strong customer authentication models in order to decrease fraudulent activity for electronic payments. 

Raising awareness

How should businesses raise awareness? According to the report, using multi-factor authentication and reminding customers to report any suspicious behaviour is a good place to start. 

Fraudsters are smart, and increasingly using technology and innovation to work smarter, so it’s important to incorporate new innovations into your business model to stay one step ahead. This could be reporting fraud in real time, creating probability scores of customers being fraudulent and using AI and machine learning to detect any suspicious activity. 


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