2020 sees record year for commercial fraud
Graydon, one of Europe’s leading providers of business data, insights, analytics and solutions, and Cifas, the UK fraud prevention service, announced new fraud analysis today indicating a huge rise in attempted commercial fraud in the first 6 months of 2020.
Graydon data from its sector intelligence networks has shown a rise of 66% in the value of the average suspected fraudulent application, and the average weekly value detected tops £1 million, an increase of 100% on the average weekly amount identified in 2019.
In just the first 6 months of 2020, a total amount of £26.3m has been detected in trade credit fraud. It’s not just businesses who find themselves the victims either. The coronavirus forced local authorities to respond quickly and provide access to government-provided grants. Cifas intelligence has picked up changing fraud since the coronavirus (Covid-19) started to spread in the UK and continues to increase daily. Cifas understand that of the 5,000 grant applications received by just one council, one in ten was flagged as potentially being linked to fraud.
Cifas have also been asked by the British Business Bank to create a solution to prevent multiple applications for Bounce Back Loans (BBL), which was announced by the chancellor on 27th April 2020 as a measure to support small businesses with a loan of up to £50,000 and 100% government-backed guarantee for lenders. Of the cases recorded by members for Covid-19 related stimulus packages, 57% are in relation to identity fraud. Just over a quarter of these are for impersonation – corporate identity theft. Additionally, 39% are in relation to application fraud, with nearly a half in relation to false income.
The pandemic has provided additional cover for committing fraud, and the stats reflect this, illustrating the need to investigate the real figures behind a business entity, particularly SMEs, who, with fewer board members, exercise much more responsibility.
This analysis comes just before the launch of Graydon Business Risk, an innovative commercial risk, fraud prevention and KYC solution, integrating Graydon’s financial data and fraud case data from Cifas’ National Fraud Database, delivered by TruNarrative’s market-leading single case management software.
More information on this platform will be released shortly. If you are an organisation who would like to take part in testing, please email us: marketing@graydon.co.uk.
Alan Norton, head of intelligence, Graydon UK:
“The statistics we’ve seen in the first half of 2020 show that fraud is not only rising exponentially, but criminals are diversifying their tactics to defraud victims. With the UK economic outlook expected to deteriorate in the coming months, and therefore desperation as an added motivation, there has never been a more important time for organisations to be proactively on the lookout for attempted fraud.”
Lee D’Arcy, commercial director, Cifas:
“The fraudulent activity we see changes regularly as people seek to take advantage of the situation of the time. The pandemic has been a great example of this where we have seen multiple applications for Bounce Back Loans and Local authorities seeing Covid-19 grant applications which are potentially fraudulent along with businesses being impersonated and created and sold on the web simply to make applications for this much needed financial support, we must work together to defend ourselves against these activities.”
