With the rising threat of various crimes in the UK, it has become crucial for businesses to be vigilant and invest in robust insurance policies and security measures to protect their assets and employees.
Why these crimes are growing is unknown, however, a previous report noted that the cost of living crisis may be fuelling the growth in cybercrimes. Whatever the case may be, Money.co.uk’s business insurance experts have highlighted the pressing need for UK businesses to take proactive measures to safeguard themselves against fraud and cybercrime.
With the rising threat of various crimes in the UK, businesses are increasingly vulnerable to various security breaches. It has become crucial for businesses to take proactive measures to protect their assets and employees from criminal activity.
However, the reasons behind the growth in crime rates are unclear. A recent report suggests that the cost of living crisis may be contributing to the surge in cybercrimes. With this in mind, Money.co.uk’s business insurance experts have emphasised the pressing need for UK businesses to invest in robust insurance policies and security measures to safeguard themselves against fraud and cybercrime.
The experts also released their first-ever Business Fraud Report, revealing that UK businesses lost over £2.1 billion to fraud last year. The report analyses police data on cybercrime and organisational fraud to highlight the various types of fraud affecting businesses in the UK, which organisations are most targeted, and where these incidents occur.
The report further reveals that the most recent quarter had the most reported incidents, but the biggest reported loss value occurred in Q3 2022, accounting for almost half (46%) of the losses from the preceding four quarters combined.
In the UK, there are several types of fraud, including advance fee fraud, consumer fraud, corporate fraud, cyber dependent fraud, public sector fraud, investment fraud and courier fraud.
Banking fraud was the most prevalent sort of fraud in the UK over the last four quarters, accounting for almost £833 million in losses over the last four quarters. Banking fraud can either come as unauthorised access to bank accounts or authorised fraud. While unauthorised access usually comes through hacking, authorised fraud occurs when a victim with access to an organisation’s accounts is duped into paying money to a criminal. However, banking fraud saw an 80 per cent decrease in value lost in the last quarter.
According to James Andrews, a Money.co.uk business insurance expert, the report serves as a reminder for businesses to purchase commercial crime insurance. This is to safeguard themselves against crimes such as theft, identity fraud, intentional data damage and securities fraud.
Andrews added that businesses should make sure their insurance policy covers not only crimes committed by employees but also by third parties.
He further said: “When choosing a policy, it’s important for business owners to make sure it covers not only crime by employees but also from third parties.”
For instance, AI sensation ChatGPT prevents users from using the program to make malware. However, another study conducted by Check Point Research revealed that hackers have discovered a way to use the software to enact cyber attacks, with posts on the dark web eluding to ways to “workaround” ChatGPT’s limitations, and according to Adam Levin, a cyber security expert, by exploiting its ability to create “increasingly sophisticated software”.
Today, cybercriminals use this software to create a “Python file stealer that searches for common file types,” and this could pose threats to businesses. In this case, businesses could employ software developers to prevent future attacks.
Andrews pointed out that it’s important to remember that business credit cards aren’t covered by Section 75 of the Consumer Credit Act. The Act permits people to request a refund from their credit card company if the selling merchant cannot be reached or denies any wrongdoing.
He, therefore, emphasised the importance of businesses having an insurance policy in place to safeguard their companies against theft.
Aside from taking cyber security insurance and investing in a comprehensive corporate commercial crime insurance policy, Andrew also advised that businesses should ensure their work computer, mobile devices, and tablets all have the most recent antivirus software to safeguard businesses from cybercrimes.
Furthermore, the experts warned against giving out details such as personal and credit card information, adding that the best way to ensure that a company’s employees are knowledgeable about potential fraud, cybercrimes and scams like phishing is to implement security training.
Given that they make up 96 per cent of corporate body types, the report reveals that limited businesses are most likely to be impacted by organisational fraud. Compared to the prior quarter, there were around 75 per cent fewer offences involving PLCs (publicly limited companies or businesses with publicly traded shares).
A breakdown of the crime rate increase from quarter to quarter
Amongst mainland police forces in the UK, Durham experienced the highest growth in organisational fraud over the last quarter – more than 52 per cent even though it saw a relatively small amount overall – and only 32 in the most recent quarter. Following Durham is Hampshire (48% to 248 offences) and South Wales (45% to 106 crimes).
In total, more than 10 per cent of additional crimes were committed, according to 22 of the 45 mainland forces.
On the other end of the spectrum, Northamptonshire experienced a fall of 58 per cent, followed by Cumbria (21%), and the City of London (25%). Only seven forces saw a drop of greater than 10 per cent.
Amid the increasing crime rate in the UK, British businesses are interested in investing in commercial crime insurance policies and security measures. The recently released Business Fraud Report by Money.co.uk experts provides a timely reminder for companies to take proactive steps to protect themselves against the ever-growing threats of fraud and cybercrime.