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What is Cyber Fraud?

Compliance Knowledge Base | Fraud Awareness

Posted by: Morgan Rennie Published: Tue, 11 Sep 2018 Last Reviewed: Tue, 11 Sep 2018
What is Cyber Fraud?

Cyber fraud is the most common and threatening form of fraud which takes place internationally. The cyber world has been expanding and growing throughout the twenty-first century, allowing fraudsters to hack victims' personal and financial information in a variety of ways. Fraudsters can use the information which they gather to then financially fund themselves, or worryingly they might use this money to fund terrorism. Therefore, it is essential that individuals and organisations are aware of how to protect themselves against cyber fraud.

How serious is cyber fraud and how does it occur?

The cyber world is expanding. We now store more personal and financial information on the internet than ever, and this has unfortunately instigated the increase in cybercrime. The cyber fraud crimes are increasing in severity. For example:

  • In 2013, Target Corporation, the second-largest department store retailer in the United States, were victims of a cyber fraud scam which compromised 40 million customers' credit card numbers.
  • In 2014, Home Depot, a large US retailer company, had 56 million of their customers' credit card numbers hacked by fraudsters via cyber crime.
  • In 2015, cyber fraudsters from China hacked into the US Office of Personnel Management and stole more than 20 million people's personal information, including their fingerprints.

The Annual Fraud Indicator in 2017 found that fraud had cost the UK £190 billion in that single year alone. Moreover, the Office for National Statistics (ONS) have found that of the fraudulent crimes which cost governments masses of money, most of these crimes are in the form of cyber fraud.

What is Cyber Fraud?

Cyber fraud can be considered as any fraudulent crime which is conducted via a computer or computer data. The crimes are extensive. Fraudsters can use the cyber world to gain access to victims' personal identity, their online accounts and their bank accounts. They can then use the money and information from this to fund terrorism. The extensive and popular use of internet banking and mobile banking means there are more opportunities than ever for criminals to commit cyber fraud. It is a very serious crime - one that needs to be cracked down on.

In 2017 the UK had a positive reaction to cyber fraud as UK cyber card fraud crimes fell by 8%. This has been the first time in the UK since 2011 that cyber fraud crimes targeted at the financial sector has fallen. On top of this, the UK market is the first to witness a reduction in cyber fraud crimes directed at card not present (CNP) transactions. This is due to the UK's effort to combat cyber fraud as it has invested money into more robust security systems in conjunction with banks. However, this has not been the situation everywhere in Europe, as Denmark and Hungary are still being attacked with cyber fraud crimes aimed at the financial sector, especially CNP transactions.

How can you protect against cyber fraud?

Cyber-crime and fraudsters normally try to hack into victims' personal and financial information online via phishing emails and viruses. If you receive an email with an attached link which either asks you to present your bank information or to confirm your bank account information, do not do so. The key to avoiding cyber-crime is to understand what your bank and related bodies would ask of you, and they would never email or call you asking for your bank information. Even if the email or the phone call sounds legitimate and honest, you should call the bank yourself and ask them if this email originated from them or not.

Make sure you destroy all traces of your personal and financial information. If a bank has posted you information with your bank details on, ensure that you shred this information, as a fraudster could find this information in a bin and utilise it online to process a CNP payment.

Furthermore, make sure you protect your computer with an anti-virus software to combat any contact made between the fraudster and your computer.

If all of your preventive methods fail, you can always contact the relevant bodies which have been established to combat cyber fraud, such as Action Fraud, which is the UK's national fraud and cyber-crime reporting centre. Furthermore, the National Fraud Authority is an executive agency of the UK Home Office established to protect the UK economy from fraud. There is help out there for the victims of cyber fraud. It is now time for individuals to be vigilant in protecting their information to combat cyber fraud.

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