Cracking the code on consumer fraud

Consumer fraud has been growing steadily over the last decade. Growth in consumer fraud has been turbocharged by the pandemic as remote work and a greater reliance on technology were spurred by lockdowns across the globe. The evolving nature and escalation of consumer fraud is impacting more victims and resulting in financial and psychological harm. It’s also challenging the way public safety agencies operate today.

Public safety organizations understand the need to respond and are evolving their operations to keep pace with the fast-changing tactics of criminals engaged in consumer fraud. The question is: What’s the best way to move forward?

We developed four models, based on consumer fraud in eight different countries, to forecast the likely increase in victim numbers, as well as growth in the direct and indirect costs of these crimes.

Drawing on our research, we identified four key pillars that pose significant barriers to change for public safety agencies as they seek to combat rising levels of consumer fraud. These same four pillars – ecosystem partners, citizen engagement, the public safety workforce and technology enablement – also reflect where the most productive opportunities for change can be found.

Based on eight countries in our study—Australia, Canada, France, Germany, Italy, Singapore, the UK and the US – we found that fraud incidents grew at nearly 50% from 2013-2019, reaching US$89B. However, the total cost of fraud in 2021 hit US$143B, growing nearly 60% in just two years combined. Put simply, the growth in consumer fraud in 2020/2021 exceeded the total increase seen over the previous six years.

Governments are increasingly recognizing that fighting consumer fraud is critical to building and maintaining public trust and confidence. And as they do, the costs are more than simply financial. Victims of fraud also often experience significant negative effects on their emotional wellbeing.

With governments recognizing that preventing consumer fraud costs less than resolving it, there’s growing momentum behind the need to act decisively. Those actions need to be coordinated across the four pillars we’ve identified to ensure maximum impact in three key areas of operational response, including:

Consumer fraud presents a fast-growing challenge. The number of victims is increasing all the time, as are the losses and impacts on people’s wellbeing. Addressing this challenge requires more than legislation alone. There’s an urgent need for public safety agencies to adapt their processes for tackling fraud. The priority? Developing a holistic approach built around the four pillars of citizens, partners, workforce and technology.

Crucially too, given the scope of this challenge, it demands an ecosystem approach that reaches across government agencies, the private and third sectors and, critically, the engagement of the public themselves.