Simon Fell is the MP for Barrow and Furness and chairs the APPG on Cyber Security. 13-19 November 2022 is International Fraud Awareness Week.
Combating fraud requires Government, business, and individuals across the UK, to work together.
As a constituency MP, one of the hardest pieces of casework to receive is when an individual or business has, through no fault of their own, been the victim of fraud.
I know my colleagues across Parliament will feel similarly angry when they meet with constituents, who have lost out due to nefarious actors, and who feel powerless as to what to do.
But fraud doesn’t just hurt individuals. I sit on the Home Affairs Select Committee and Chair the APPG on Cyber Security, and it is clear to me that fraud is also a national security issue, one that impacts businesses and damages our economy.
We know there is an ever-greater threat to our constituents and to British businesses. Recent events in Westminster have reopened a discussion about cyber security and staying vigilant online, such as the reports about the Prime Minister’s phone being hacked.
Whether it is individuals, criminal organisations, or State-sponsored actors, perpetrators of fraud are becoming ever more sophisticated. According to recent studies, fraud has reached ‘epidemic levels’ in the UK, now making up 40 per cent of all reported crime. The Office for National Statistics estimated that there are 4.6 million fraud offences each year, and recent figures from UK Finance reveal criminals stole £40.5 million from businesses through authorised push payment fraud during the first half of 2022.
The impact of fraud, particularly on small business, is profound. Research by Barclays in 2018 found that 44 per cent of small to medium-sized enterprises (SMEs) had been targeted by fraudsters and almost one in four (23 per cent) had fallen victim to fraud. The average cost of fraud to a small business was found to be £35,000, and the study estimated that this had led to the loss of 50,000 jobs.
If this study was conducted today, we can expect these figures would be even higher.
We know small businesses have unique challenges when it comes to dealing with fraud, and that these only increased during the disruption caused by the pandemic. When I ran my own small business, I was not only CEO, but also in charge of managing clients, marketing, HR, finance and, somewhere towards the bottom of my list of priorities, protecting myself and my team from threats of fraud and cyber attack.
It is no surprise that all too often those vulnerabilities are left unaddressed – often SMEs don’t understand the scale of the threat until it is too late. Criminals take advantage of shared home and work IT equipment, or impersonate senior managers or company suppliers requesting urgent payments. There is clearly more to do to support and ensure SMEs are able to combat and prevent fraud.
New projects are already happening in this space. Just this week UK Finance’s Take Five to Stop Fraud campaign have collaborated with Amazon to launch a new interactive quiz to help all businesses, particularly SMEs, stay safe from fraud.
Recreating an office environment, the quiz helps employers and employees navigate situations where criminals may be targeting their business. It aims to give people the knowledge and ability to spot real-world scam calls, texts, emails and social media posts. It reminds businesses of Take Five’s advice to Stop, Challenge and Protect themselves against fraud.
Leveraging Take Five’s and UK Finance’s knowledge and expertise of the fraud landscape, along with Amazon’s network of SMEs, with 85,000 of them selling on its UK Store, this model of cooperation should be encouraged as we all try to raise awareness of and try to prevent the impacts of fraud.
People in my constituency of Barrow and Furness are consistently reminded of the importance of security, including across cyber, due to their involvement in the construction of our nuclear deterrent at BAE Systems.
But often the first line of defence is at home or at work. Raising awareness of fraud and its impacts particularly among our smaller business community, is the key first step in combatting crime, and I hope this International Fraud Awareness Week we can make a start.