The view from the ground

Think tank: Social Market Foundation

Author(s): Richard Hyde; Peter Wilson

September 14, 2023

This report from UK think tank the Social Market Foundation looks at the extent of fraud and its economic and psychological impact on victims.

The UK is experiencing an epidemic of fraud, yet the threat of it has remained neglected in political debates about crime, with insufficient research into the problem. This SMF report investigates the extent of fraud, its economic and psychological impact on victims, and sheds new light on the public’s attitudes towards key debates on fraud policy. The UK is experiencing a “fraudemic”. Fraud cost individuals in the UK around £12.8 billion in 2021-22, while polling suggests 9% of the UK’s population fell victim in the same year.

Our research found that fraud has significant economic as well as social and psychological impacts on its victims, and that those on low incomes and the elderly tend to be hit hardest. While the Government’s Fraud Strategy is welcome, it cannot overcome the collective action problems that hamper the counter-fraud effort. No one private company can tackle the problem on its own and too many public-sector bodies are involved for the response to be effective.

The report surveyed the public and fraud victims on a range of fraud policy issues, finding that the public believe that the liability for reimbursing fraud victims should be spread widely, including digital services companies as well as financial institutions; that the public and fraud victims are agreed that it is more important to have checks and verifications than speed and convenience when making payments and transfers; and that, while the general public are on balance more inclined to want their data kept secure even if this makes data sharing to tackle fraud more difficult, the reverse is true of fraud victims. The report also contains 13 recommendations on how to address these issues.