Case Studies

Fraud, the ‘volume crime of our time’

by Mark Rowe

Fraud against UK citizens, businesses and the UK public purse has reached epidemic levels – it is the ‘volume crime of our time’, and amounts to a national security concern, says the defence and security think-tank RUSI.

The report calls for a ‘new national security approach to tackling fraud, based on a ‘whole of system’ response’. For the full 56-page report on ‘The Silent Threat’, visit the RUSI website.

It argues that fraud, being ‘hidden and less media-worthy’, continues to be an under-resourced area within policing, the wider public sector and the intelligence community; yet fraud affects cyber, organised crime or terrorism – that is to say, other threats to national security. It is essential that a new fraud strategy comes with a significant boost in resourcing, the authors say. They point to fraud’s risk to public finances, and call for a ‘new approach to public–private partnership’. Among the report’s 13 recommendations, it asks that the National Security Council (NSC) commission a new ‘whole of system’, public–private strategy for tackling fraud.

While in the last year, ‘greater airtime for fraud in government, parliamentary and media circles is welcome’, the report says this has not resulted in the fundamental strategic shift in thinking needed to tackle the problem, ‘with the debate continuing to view the issue primarily as one of criminal justice. While a policing and criminal justice response is clearly an essential part of the response (and one which this research found to be chronically under-resourced), this response alone has clear limitations against the modern face of fraud, which is increasingly cross-border and cyber enabled.’

Fraud, the report concludes, ‘has the potential to disrupt society in multiple ways, by psychologically impacting individuals, undermining the viability of businesses, putting pressure on public services, fuelling organised crime and funding terrorism’. The report shows various connections between terrorists such as the 2017 Manchester Arena bomber and frauds, typically by ‘lone actors’, notably scams via the online auction site eBay.

The report calls for ‘actions not words’; such as agencies charged with distributing benefits and government support should receive basic training on how to identify terrorist financing vulnerabilities and should make greater use of tech-based tools, such as IP address monitoring and geo-location tools.

The report concludes that ‘from whichever angle the problem of fraud is assessed, its continued lack of prominence in the UK’s national security dialogue is hard to justify. Conversely, only the focus, leadership and resourcing which a national security response provides will be able to turn the tide’.

Comment

Brett Beranek, Vice-President and General Manager, Security and Biometrics Line of Business at Nuance Communications says: “Countless unsuspecting technology users are victims of a cybercrime or fraud each year – and this number continues to increase during the pandemic, as online interactions such as banking and shopping take place in unprecedented volume.

“Forward-looking CISOs should be looking to transition to password-less authentication with the twin goals of customer convenience and enterprise security. Consumers want a digital experience that is easy, secure, and free of passwords. As more consumers shift to online channels in order to bank, socialise, play, and shop, they demand a more sophisticated and secure experience, free of the relics of PINs and passwords.

“Biometrics such as voice recognition, behavioural recognition, fingerprints, and eye scans are critical to a secure online presence. Thanks to years of interacting with smart devices, customers often already feel comfortable with fingerprint ID and facial recognition. Unfortunately, most of these device-side biometric authentication methods don’t have any real impact on stopping fraudsters. This is because, firstly, it is challenging to determine who has created the biometric print, and secondly, the prints are limited to a specific device, making them difficult to leverage across multiple channels and impossible to port from one device to the next. It is therefore server-side biometrics, such as voice biometrics, that will have result in both significant fraud prevention and frictionless, secure, convenient customer experiences.”

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