How is Fraud Affecting Business?

HOW IS FRAUD AFFECTING BUSINESS?

A QUICK GUIDE TO THE THORNY ISSUE OF FRAUD,PAYMENTS, IDENTITY AND YOUR CHOICES



Fraud is costing our businesses millions every year. But the implications of fraud go far beyond cost alone. Fallout from fraud hits business reputation,instils mistrust in customers'minds and,in extreme cases, could lead to businesses folding.



Outlined below are the what,why,where and how it's happening and just some of your options to help safeguard you,your customers and your business.



Figures from the National Fraud Authority

FRAUD COSTS THE UK �38 BILLION A YEAR

FRAUD COSTS THE UK PRIVATE SECTOR �12 BILLION A YEAR

PUBLIC SECTOR FRAUD COSTS THE UK �21.2 BILLION A YEAR



WHY IS FRAUD COMMITTED?

Fraud is on the rise and fraudsters are getting smarter,faster and more inventive and this trends is not expected to change any time soon. Why? Because online transaction and communications are fast becoming standard business practice.



SO WHAT IS FRAUD?

Fraud is broadly any intentional deception made for personal gain-and it's usually at your expense.



Unintentional payment errors have exactly the same impact and they cost your business financially,operationally and reputationally.



WHAT ARE THE TYPES OF FRAUD THAT YOUR BUSINESS MAY BE EXPOSED TO?



CUSTOMER FRAUD

When someone deliberately gives you false information with the intention of de-frauding you.



PROFESSIONAL FRAUD

When a trusted adviser tries to divert your funds for their own gain.



ID THEFT AND MISREPRESENTATION

When someone steals or creates another person's details.



ACCOUNT TAKEOVER

When someone gets their hands on another's account information and starts using it without their knowledge.



SLEEPER FRAUD

When someone develops a relationship with you to build a credit line before leaving with your money.



INSIDER FRAUD

When a colleague, agent or trusted adviser uses confidential information with the intention of cheating you.



PAYMENT FRAUD

When fraudulent transactions are made by someone using a legitimate customer's account.



MONEY LAUNDERING

The process of disgusting illegal funds so that they look like they are from legitimate sources.



HOW MUCH MAY FRAUD BE COSTING YOUR BUSINESS?

The figures vary enormously from sector to sector, but these are a handy indicator of the scale of the problem:



CUSTOMER FRAUD ACCOUNTS FOR OVER 50% OF ALL CASES



THE VAST MAJORITY INVOLVE SOME FORM OF DATA MASSAGE OR MISREPRESENTATION



TOTAL FRAUD LOSSES ON UK DEBIT & CREDIT CARDS TOPPED �360 MILLION IN 2010



MOTOR FRAUD,INCLUDING "STAGED ACCIDENTS" IS ESTIMATED AT �350 MILLION A YEAR,WHICH IS DRIVING UP THE COST OF MOTOR INSURANCE



CHARITIES ARE BELIEVED TO LOSE �1.3 BILLION A YEAR TO FRAUDSTERS

AROUND 2.4% OF THEIR ANNUAL INCOME



GENERAL INSURANCE FRAUD LOSSES OW TOP �2.1 BILLION EVERY YEAR



TELECOM FRAUD COSTS �730 MILLION EVERY YEAR



STUDENT FINANCE FRAUD COSTS �31 MILLION A YEAR



Figures from the National Fraud Authority



WHEN IS FRAUD COMMITTED?

AT THE POINT OF APPLICATION

Application fraud is one of the biggest sources of lost revenue, particularly among organisation managing high application volumes. It always directly affects profitability.



DURING THE CUSTOMER RELATIONSHIP

Open account fraud takes place when an established and apparently legitimate customer suddenly starts behaving fradulently.



WHAT CAN YOUR BUSINESS DO TO PREVENT AND DETECT FRAUD?

Specialists from the world of fraud,payments and identity can help you to separate your genuine customers from the fraudsters by applying automated checks against information already available.



It's something of a balancing act-CUSTOMER EXPERIENCE and PROFITABILITY against managing RISK and FRAUD. how to get the balance right for your business-YOU CHOOSE!



PRODUCED BY EXPERIAN

website:www.experian.co.uk/you-choose

email:[email protected]

phone:0845 266 6604 HOW IS FRAUD AFFECTING BUSINESS? A QUICK GUIDE TO THE THORNY ISSUE OF FRAUD, PAYMENTS, IDENTITY AND YOUR CHOICES Fraud is costing our businesses millions every year. But the implications of fraud go far beyond cost alone. Fallout from fraud hits business reputation, instils mistrust in customers' minds and, in extreme cases, could lead to businesses folding. Outlined below are the what, why, where and how it's happening and just some of your options to help safeguard you, your customers and your business. FRAUD COSTS THE UK WHY IS FRAUD COMMITTED? £38 BILLION A YEAR Fraud is on the rise and fraudsters are getting smarter, faster and more inventive and this trend is not expected to change any time soon. Why? Because online Figures from the transactions and communications are fast becoming standard business practice. National Fraud Authority FRAUD COSTS THE UK SO WHAT IS FRAUD? PRIVATE SECTOR Fraud is broadly any intentional deception made for personal gain - and it's usually at your expense. £12 BILLION A YEAR PUBLIC SECTOR Unintentional payment errors have exactly the same impact and they cost your business financially, operationally and reputationally. FRAUD COSTS THE UK £21.2 BILLION A YEAR HOW MUCH MAY FRAUD BE WHAT ARE THE TYPES OF FRAUD THAT YOUR BUSINESS MAY BE EXPOSED TO? COSTING YOUR BUSINESS? The figures vary enormously from sector to sector, but these are a handy indicator of the scale of the problem: CUSTOMER FRAUD PROFESSIONAL FRAUD When someone deliberately gives you false information with the intention of de-frauding you. When a trusted adviser tries to CUSTOMER FRAUD ACCOUNTS divert your funds for their own gain. FOR OVER 50% OF ALL CASES ID THEFT AND MISREPRESENTATION ACCOUNT TAKEOVER When someone gets their hands on another's account THE VAST When someone steals or MAJORITY creates another person's details. information and starts using it without their knowledge. INVOLVE SOME FORM OF DATA MASSAGE OR SLEEPER FRAUD INSIDER FRAUD MISREPRESENTATION When someone develops a relationship with you to build a credit line before leaving with your money. When a colleague, agent or trusted adviser uses confidential information with the intention of cheating you. TOTAL FRAUD LOSSES ON UK DEBIT & CREDIT CARDS TOPPED £360 MILLION IN 2010 PAYMENT FRAUD MONEY LAUNDERING When fraudulent The process of disguising illegal funds so that they look like they are from legitimate 5. transactions are made by someone using a legitimate customer's account. 2010 sources. MOTOR FRAUD, INCLUDING "STAGED ACCIDENTS" IS ESTIMATED AT £350 MILLION A YEAR, WHICH IS DRIVING UP WHEN IS FRAUD COMMITTED? AT THE POINT OF APPLICATION DURING THE CUSTOMER RELATIONSHIP Application fraud is one of the biggest sources of lost revenue, particularly among organisations managing high application volumes. It always directly affects profitability. Open account fraud takes place when an established and apparently legitimate customer suddenly starts behaving fraudulently. THE COST OF MOTOR INSURANCE CHARITIES ARE BELIEVED TO LOSE £1.3 BILLION A YEAR WHAT CAN YOUR BUSINESS DO TO PREVENT TO FRAUDSTERS AND DETECT FRAUD? AROUND 2.4% FRAUD Specialists from the world of fraud, payments and identity can help you to separate your genuine customers from the fraudsters by applying automated checks against information already available. OF THEIR ANNUAL INCOME GENERAL INSURANCE FRAUD It's something of a balancing act - CUSTOMER EXPERIENCE and PROFITABILITY against managing RISKand FRAUD. how to get the balance right for your business - YOU CHOOSE! LOSSES NOW TOP £2.1 BILLION EVERY YEAR TELECOM FRAUD PRODUCED BY EXPERIAN ... COSTS £730 MILLION DExperian EVERY YEAR website: www.experian.co.uk/you-choose email: [email protected] phone: 0845 266 6604 STUDENT FINANCE FRAUD COSTS Source: £31 MILLIONA YEAR http://www.homeoffice.gov.uk/publications/agencies-public-bodies/nfa/annual-fraud-indicator/ Figures from the National Fraud Authority 2012. The word "EXPERIAN" and the graphical © Exp registered in the EU, USA and other countries. The graphical device is a registered Community design in the EU. All rights reserved. eare trademarks of E: and/or its ed companies and may Experian registered in England and Wales under the company registration number 653331. Registered office address: Land mark House, Experian Way, NG2 Business Park, Nottingham NG80 1z.