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18th July 2019

One in seven British adults admit to committing fraud according to latest CIFAS research

  • All types of fraud are estimated to cost the UK economy around £190bn.
  • ‘Fronting’ revealed to be the most common type of fraud committed by British public, with 6% of British adults saying they have committed it.
  • ‘Fronting’ regarded as being “reasonable” by four in ten (39%) Britons.
  • Younger people more likely to carry out fraud, with one in five (21%) of those aged 18-34 saying they have committed at least one form of first-party fraud.

Cifas, the UK’s leading fraud prevention service, has today released a report in conjunction with WPI Economics, showing one in seven (14%) British adults have committed one or more types of consumer fraud, while two in three (66%) know someone who has.

There are many types of first-party fraud – including:

  • Fronting – setting up a service in someone else’s name to save money, for example young drivers taking out car insurance under their parent’s name, nominating themselves as a named driver
  • Deshopping – buying items, usually clothing, with the intention of using/wearing them before returning them for a full refund
  • Money muling – agreeing to transfer illegal funds to a third-party from their bank account, generally keeping a share for themselves
  • Claimed non-delivery – ordering goods online and falsely claiming they haven’t been delivered to get a refund

The most common type of consumer fraud committed by the British public is ‘fronting’ (6%), closely followed by ‘deshopping’, which 1 in 20 (5%) admit to carrying out.

Attitudes towards first party fraud

Alarmingly, many Britons consider some types of consumer fraud as reasonable, with the highest proportion (39%) seeing ‘fronting’ as reasonable. However, the consequences of committing this type of fraud could see individuals driving without valid insurance, and in some cases, result in a criminal record.

Interestingly, ‘money muling’ is considered reasonable by one in five (22%) Britons, the consequences of which could result in individuals unable to open a bank account and obtain a mortgage, as well as a potential prison sentence.

Demographics of consumer fraud

The research revealed that younger people were more likely to take part in fraudulent activity, with 21% of 18-34 year olds admitting they have committed first-party fraud, compared to only 6% of people aged over 65.

Prevention key to reducing fraud

The report found that companies are more likely to invest their energy into detection and prosecution of consumer fraud, rather than prevention. This is despite the fact that detection can be problematic, and prevention is generally regarded to be more effective. The report argues that efforts to reduce fraud would be better directed towards awareness campaigns focused on educating consumers about different types of fraud and their consequences, such as criminal records, fines, or difficulties in obtaining banking and credit facilities.

Chief Executive Officer of Cifas, Mike Haley, says: ‘It’s sad to note how common fraud is among the British population, and that even more people find such acts of dishonesty acceptable.

‘Many people seem unaware that what they consider to be reasonable,  such as buying shoes to wear for a night before returning them, or adding their parent as a main driver for cheaper insurance, can be considered acts of fraud.  

‘We wanted to raise awareness of the consequences what can be considered everyday fraud, such as finding it difficult to obtain a financial product or a mobile phone account, and in some cases such as being a money mule, end up with a criminal record.’

Matthew Oakley, Director of WPI Economics, says: ‘It is shocking that one in seven British adults admit to having committed first-party fraud.

‘That many people also see this as reasonable highlights the lack of understanding of fraud as a criminal and harmful act.

‘This report shines a light on some of the routes to people committing fraud and highlights how industry can work together to tackle these; in particular by making sure that fewer people see fraud as reasonable and that the opportunities to commit fraud are reduced.’  

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