As the UK prepares for the implementation of new mandatory fraud reimbursement rules, the Social Market Foundation (SMF), in partnership with Santander UK, has published a report revealing the true extent of the global ‘fraudemic’.
The report, based on a survey spanning 15 countries and over 28,000 respondents, highlights the growing global threat posed by fraudsters and outlines key actions that need to be taken to counter the rising tide of financial crime.
The report, titled It’s a Fraudster’s World, uncovers that more than a fifth (21 per cent) of respondents across 15 countries have fallen victim to fraud, resulting in an eye-watering £168billion in direct losses. When factoring in the broader social costs, such as loss of productivity in the aftermath of fraud, this figure balloons to over £420billion across the surveyed nations.
In the UK alone, between 2021 and 2023, an estimated 10 million people became victims of fraud, costing the economy around £16billion, with individual losses averaging £907. Emotional tolls were also significant, with 33 per cent of UK victims reporting emotional distress, and 18 per cent noting a financial impact.
International cooperation
The report emphasises the global nature of fraud, with criminal networks often operating across borders, making it difficult for individual nations to respond effectively. UK law enforcement, in particular, faces challenges in tackling fraudsters based overseas due to geographical and legal constraints. While the UK government has focused on fraud in political pledges, international collaboration remains lacking compared to other forms of economic crime.
Santander and SMF’s research underscores the importance of international coordination in the fight against fraud, recommending that the UK government take a leadership role by advocating for a comprehensive global agreement on fraud prevention. This could include prioritising resources, strengthening law enforcement capabilities, and ensuring private sector companies – from banks to telecoms providers – take a more active role in combating fraud.
Stephen White, chief operating officer at Santander UK, echoed these sentiments, stressing the need for global collective action to tackle the rising threat of fraud.
“Fraud has become a global phenomenon, as such it needs global, collective action. The UK is in a prime position to lead this charge, but we need renewed focus on tackling the fraudemic across government, banks, and the global technology and communication companies that connect criminals with potential victims.”
Fraud’s impact beyond finances
The report also sheds light on the psychological effects of fraud, with 40 per cent of victims worldwide reporting reduced trust in others after being targeted. A further 12 per cent said that their experience had led them to reduce their use of the internet and communication technology, underlining the broader societal impact of fraud beyond financial losses.
With rising smartphone adoption and an increasingly connected world, fraudsters are leveraging digital platforms to target victims across borders. Public recognition of this issue is growing, with the report finding that 88 per cent of people believe digital platforms should bear responsibility for compensating fraud victims, while 84 per cent hold telecoms and internet providers accountable.
Calls for stronger government response
To address the growing threat, the SMF is calling on the UK government to take a series of key steps, including:
Leading international efforts to combat fraud through stronger cross-border coordination
Establishing a cross-departmental Economic Crime Leadership Group to prioritise fraud prevention
Ensuring long-term funding for public awareness campaigns like ‘Stop! Think Fraud’
Introducing legal duties for companies within the ‘fraud chain’ to prioritise fraud prevention
Looking forward
As the UK rolls out new fraud reimbursement rules, the Santander and SMF’s report serves as a timely reminder that financial crime has become a global epidemic. While national efforts are essential, international cooperation is critical to tackling this issue at scale. Without such collaboration, countries like the UK risk being outpaced by fraudsters operating with impunity across borders.
As Richard Hyde, senior researcher at the SMF, pointed out: “Any nation acting alone remains ill-equipped to deal with today’s fraudsters, who can operate from anywhere and claim a victim thousands of miles away.”
The report sets the stage for a renewed focus on fraud as not just a financial issue but a societal one, calling for a united effort from governments, banks, and tech companies to protect consumers in an increasingly digital world.
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