Social and psychological implications of fraud

DOI: https://doi.org/10.58248/PN720

The UK Government has acknowledged fraud as a “significant threat to the people, prosperity and security of the UK”. In 2023, fraud was the most common offence against individuals.

There are many different types of fraud against individuals, such as bank and credit account frauds or purchase frauds. Government and stakeholders have highlighted particular concerns about ‘authorised push payment’ (APP) frauds, where fraudsters trick victims into making payments or sharing information like account details. These often involve ‘social engineering’, where fraudsters create a direct relationship with victims to manipulate them.

Government, law enforcement, private sector and third sector bodies are involved in the response to fraud against individuals. Following rises in fraud during the Covid-19 pandemic, since 2023, there has been a renewed government focus on addressing fraud and its impacts. The cross-sector Home Office-led Fraud Strategy aims to reduce fraud by 10% from 2019 levels by December 2024. It includes specific aims to improve victim support; reimburse more victims; and improve communications. Other policy developments include the Online Safety Act 2023 and the Online Fraud Charter.

This POSTnote focuses on fraud against individuals, although fraud can also occur against public sector, commercial and charitable bodies. It applies to England and Wales; legal, policing and criminal justice approaches to fraud may differ in the other nations of the UK.

• Fraud accounts for 4 in 10 offences against individuals. 6% of adults were a victim of fraud in 2023. There are many types of fraud, such as purchase or romance frauds. Fraud changes quickly and much is cyber-related.
• The UK Government’s 2023 Fraud Strategy includes aims to improve victim support, reimburse more victims and improve communications. It also seeks to prevent more frauds from taking place. This will involve actions by government, law enforcement, the private sector, and individuals.
• The stereotype of elderly fraud victims is inaccurate compared to observed fraud risks. Psychological and social factors may affect risk, for example, individual personalities, circumstances, or market-related vulnerabilities, such as demand for rental accommodation.
• In addition to financial loss, fraud can cause emotional, psychological and health impacts, and can harm people’s relationships. Impacts may vary for individual victims, and by different fraud characteristics.
• Victims are most likely to report fraud to their bank or account provider, rather than the national reporting service Action Fraud or police.
• The published evidence base for fraud against individuals is limited. However, academics and practitioners suggest several areas to consider in implementing effective fraud prevention, including education, and victim care.

POSTnotes are based on literature reviews and interviews with a range of stakeholders and are externally peer reviewed. POST would like to thank interviewees and peer reviewers for kindly giving up their time during the preparation of this briefing, including:

Members of the POST Board*

Home Office*

Financial Conduct Authority

National Economic Crime Victim Care Unit (NECVCU)*

Louise Baxter Scott, National Trading Standards Scams Team*

Professor Mark Button, University of Portsmouth

Dr Elisabeth Carter, Kingston University*

Dr Sara Correia-Hopkins, University of Swansea

Matt Gardner and Tim Stacey, Which?*

Paul Jacobus, Ofcom

Dr Rasha Kassem, Aston University*

Emeritus Professor Stephen Lea, University of Exeter*

Professor Michael Levi, Cardiff University*

Paul Maskall, UK Finance

Giles Mason and Sarah Sinden, UK Finance

Alex Mayes, Victim Support*

*denotes people and organisations who acted as external reviewers of the briefing.

Government Fraud Strategy: Fraud Strategy: stopping scams and protecting the public

Home Affairs Committee Inquiry – Fraud: Fraud - Committees - UK Parliament