One in seven Brits admit to committing fraud

ceo fraud

A new report released today shows one in seven British adults have committed one or more types of consumer fraud, while two in three know someone who has.

There are many types of first-party fraud – including:

  • Money muling – agreeing to transfer illegal funds to a third-party from their bank account, generally keeping a share for themselves
  • Claimed non-delivery – ordering goods online and falsely claiming they haven’t been delivered to get a refund

The most common type of consumer fraud committed by the British public is ‘fronting’, closely followed by ‘deshopping’, which 1 in 20 (5%) admit to carrying out.

Attitudes towards first party fraud

Alarmingly, many Britons consider some types of consumer fraud as reasonable, with the highest proportion seeing ‘fronting’ as reasonable. However, the consequences of committing this type of fraud could see individuals driving without valid insurance, and in some cases, result in a criminal record.

Interestingly, ‘money muling’ is considered reasonable by one in five Britons, the consequences of which could result in individuals unable to open a bank account and obtain a mortgage, as well as a potential prison sentence.

Demographics of consumer fraud

The research revealed that younger people were more likely to take part in fraudulent activity, with 21% of 18-34 year olds admitting they have committed first-party fraud, compared to only 6% of people aged over 65.

Prevention key to reducing fraud

The report found that companies are more likely to invest their energy into detection and prosecution of consumer fraud, rather than prevention. This is despite the fact that detection can be problematic, and prevention is generally regarded to be more effective. The report argues that efforts to reduce fraud would be better directed towards awareness campaigns focused on educating consumers about different types of fraud and their consequences, such as criminal records, fines, or difficulties in obtaining banking and credit facilities.

Chief Executive Officer of Cifas, Mike Haley, who was responsible for the report, commented: ‘It’s sad to note how common fraud is among the British population, and that even more people find such acts of dishonesty acceptable.

‘Many people seem unaware that what they consider to be reasonable,  such as buying shoes to wear for a night before returning them, or adding their parent as a main driver for cheaper insurance, can be considered acts of fraud.

‘We wanted to raise awareness of the consequences what can be considered everyday fraud, such as finding it difficult to obtain a financial product or a mobile phone account, and in some cases such as being a money mule, end up with a criminal record.’

Matthew Oakley, Director of WPI Economics, who co-authored the report, said: ‘It is shocking that one in seven British adults admit to having committed first-party fraud.

‘That many people also see this as reasonable highlights the lack of understanding of fraud as a criminal and harmful act.

‘This report shines a light on some of the routes to people committing fraud and highlights how industry can work together to tackle these; in particular by making sure that fewer people see fraud as reasonable and that the opportunities to commit fraud are reduced.’