Fraud costs the UK around £73billion a year. A lot of fraud is never reported, and some fraud is never even detected, so the true cost and extent of fraud is partially unknown and may well be more than £73billion.
Millions of individuals are affected each year, losing an average of £268, but many lose much more – sometimes entire life-savings. Businesses suffer fraud more than anyone else and it can wipe out companies and jobs.
Fraud doesn’t just have a financial cost, it also has a human cost. Many victims of fraud are so embarrassed to find out they were conned that they don’t report the fraud, avoid telling friends and family and become withdrawn and distrustful.
These pages and the associated activities look at some of the data and statistics about fraud, who is affected, what the implications are to victim’s lives and how we can educate people to prevent them becoming victims of another Scam.
The Financial Cost – aimed at students aged 13-16
It starts with a quick How Much? Quiz, before looking at Cash Machinations and how much money we spend in the UK. The final activity looks at financial cost of fraud and how much money is lost from the economy due to fraud and how different individuals are affected.
Fraudsters have always existed. From medieval beggars who pretended to be disabled to get given charity, to selling worthless fool’s gold or fake religious idols, some people have always looked for a way to make easy money. And some trusting people have always found themselves paying the price for being a victim of fraud. Although we’re unlikely to believe a man telling us that snake oil will cure all our diseases these days (a common scam in the early 20th Century), there are always new scams to fall for. The methods used by fraudsters to trick their victims are always changing – particularly now when technology is changing so fast and most people are struggling to keep up with all the developments. As people and banks learn about one scam and find a way to stop it, the fraudsters find a new one. The best way to protect ourselves from fraud is to keep informed be suspicious and stay SAFE:
- Suspect anything or anyone you don’t know – no matter what or who they claim to be.
- Ask questions. Whatever a fraudster tries, you have the power to stay in control.
- Find out for certain who you’re dealing with. Challenge anything that seems suspect.
- End situations that make you uncomfortable. If you feel threatened, contact the police.
How much fraud is there in the UK each year? How many weeks of pocket money is that? Want to have a guess? Try theHow Much? Quiz Ask your teacher for the answers!
How much do we spend by cash and how much do we spend using cards and other mechanisms? The Cash Machinations exercise lets you find out more about our spending habits, the network of cash machines we have in the UK and how much we use them.
Calculating the extent of fraud is difficult. It’s a crime that is under-reported because the victims often feel foolish at being taken advantage of. The Financial Cost of Fraud looks at the statistics and how much money is lost from the economy due to fraud and how vulnerable different individuals are to being targeted.
Fraud isn’t just about the loss of money. It can have a serious human cost too. “One of the striking myths about fraud is it has less impact than some other crimes. This is wrong – fraud has a devastating impact on victims and their families.”Mark Button, Director of the Centre for Counter Fraud Studies.
Some people think fraud is a victimless crime – that if they steal someone’s bank card to do a bit of online shopping or take a few quid out of their account, insurance will cover it, or the banks will pay the money back to the victims. Not only is this not true, fraud has psychological impacts on the victim and their family that can be more long-lasting than the financial loss.
There are an ever-increasing number of scams and frauds, and victims of these scams – ranging from those who’ve had their money stolen at a cash point, to those who have lost a lifetime’s business or their entire pension pot. Although the tactics and amounts of money lost vary, the effects on the victim are nearly always the same – victims feel angry and embarrassed and feel like never trusting people again.
As more and more victims are exposed to more fraud, people become less trusting and more guarded. Society and the way people interact with each other can change – instead of expecting the best from people, we fear the worst from everyone.
Companies have been known to collapse if they become a victim for fraud. This can leave thousands of people without a job, affecting the wealth and happiness of their families. The number of victims and the impact on their lives can be hard to quantify.
Read the following quotes from victims and then watch the Out of Your Pocket See it! Film Clips to answer the questions in the Human Cost of Fraud download activity.
“Until you’ve been done over you don’t have a clue. I don’t trust anyone now.”
“In business you sometimes take sensible, calculated risks. But the fact I didn’t spot her evil work is frightening. You lose faith in your own ability, it’s tragic. I used to always back my own people, I was a loyal employer and hoped they would repay that with loyalty. But this woman wanted to ruin me.”
“For 14 months, I could not sleep for more than two hours at a time without waking up.”
“My company was worth £650,000 when she started. Within just 14 weeks we were not even worth £35,000. It had all gone.”
“The woman who defrauded my company is pure gold-plated evil. She knew how to take us for everything. She was so good she effectively made the fraud vanish from the books, not even the receiver could bring her to account. The police said there was nothing they could do. She was untouchable. What she did was dreadful but it’s even worse knowing she is still out there and she will be doing it to someone else now.”
The Human Cost – aimed at students aged 11-16
The human cost looks at the human as well and the financial impact of fraud and discusses a few common scams and what to be aware of. It can be used by students of 11-16 and the Human Cost of Fraud download should be read before watching the See it! Film Clips.