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Fraud and Cyber Crime – distinctly different or intrinsically linked?


Although fraud and cybercrime are often lumped together in terms of risk management, they are distinctly different. Not all fraud is committed online, and not all online crimes involve fraud.

Understanding the difference between fraud and cybercrime, as well as how the two are linked, will help you implement better systems to minimise risk and identify threats.

What is fraud?

Fraud can be committed against individuals, businesses, or organisations and can occur online or offline.

Examples of fraud include:

  •  Making a dishonest representation for your own advantage or to cause another a loss
  • Purposely neglecting to disclose information when you had a duty to do so
  • Abusing your position – if you have a duty to protect the financial interests of others
  • False accounting
  • Using accounting documents which you know are misleading
  • Conspiring to commit fraud by agreeing to do something which causes loss to a third party

Common types of fraud include:

  • Identity fraud
  • Ticket scams
  • Phishing emails and texts
  • Internal fraud (expenses, false invoices, ghost employees etc)
  • Theft of confidential information
  • Romance fraud
  • Investment scams
  • Pension fraud
  • Advance fee, lottery, and safe account scams
  • Charity donation fraud
  • Credit and debit card fraud
  • Insurance, mortgage and benefit fraud
  • Misappropriation of property and/or funds
  • Collusion fraud (bribery, procurement, recruitment and money laundering)

What is cybercrime?

Cybercrime is any crime that is committed online or using computers or technology. While most fraud is committed for financial gain, the motivation behind cybercrime varies. It could be driven by financial, political or sexual motivations, or it could be a personal vendetta or revenge driven by a real or imagined conflict.

Common types of cybercrime:

  • Cyber fraud
  • Hacking
  • Theft of money, data or intellectual property
  • Privacy violation
  • Cyber bullying
  • Cyber stalking

In other words, cybercrime is any criminal behaviour conducted using computers, networks or the internet.

The impact of fraud and cybercrime on businesses and organisations

Although not all fraud is committed online, and not all cybercrimes are fraud, there is a significant crossover.

According to the Office of National Statistics (ONS), the proportion of cyber-related fraud incidents increased from 53% to 61% from March 2020 to the year ending March 2022.

Although this increase could be attributed to the lockdowns during the pandemic, they shouldn’t be overlooked. Criminals have clearly found new ways to commit online fraud and are unlikely to stop just because lockdowns are over.

Cyber fraud is a real risk to businesses and organisations of all sizes and sectors – money, data, and goods are all valuable to criminals. The cost of fraud to UK taxpayers is £137 billion every year.

And it’s not just big businesses that suffer – 60% of SMEs have experienced fraud in the last 12 months.

With that in mind, all businesses should put cyber security and fraud awareness high on their priorities.

How can businesses reduce risk?

While you can never eliminate the risk of cyber fraud completely, there are several steps businesses and organisations can take to mitigate the risk. Here are just three of the key places to get started.

Enhanced cyber security

Cyber security is all about protecting your business from cyber threats. Common security tools and systems include:

  • Identity and access management
  • Antivirus
  • Firewalls
  • Endpoint protection
  • Anti-malware
  • Intrusion prevention/detection systems
  • Data loss prevention
  • Endpoint detection and response
  • Security information and event management
  • Encryption tools
  • Vulnerability scanners
  • Virtual private networks (VPNs)
  • Cloud protection

Much like a building alarm system and CCTV might make a criminal think twice about breaking into physical premises, having good cyber security systems can make cyber criminals think twice about breaking into your network.

But if you don’t have any cyber security systems in place, you are leaving yourself open to risk. And that isn’t just a risk to you – it’s a risk to your customers. For example, an online payment portal that isn’t properly protected makes it easy for criminals to steal credit card information.

Make sure your business has up-to-date and adequate cyber security systems in place. If you’re looking at digital transformation, CRM systems, or online portals, work with reputable companies (like Meritec) that prioritise security.

Robust GDPR Policies

The General Data Protection Regulation (GDPR) was created to protect personal data. Unfortunately, many businesses and organisations still do not have sufficient GDPR policies.

A big part of the problem is a lack of employee training – if employees don’t understand why or how to protect data, they are more likely to make mistakes.

And these mistakes can lead to huge data breaches, leading to financial losses and a damaged reputation. If your customers can’t trust you to look after their data, they will look elsewhere.

Ensure you have robust GDPR policies in place and that your employees fully understand their role in ensuring GDPR compliance.

Fraud Awareness & Cybercrime Awareness Training (Creating a Human Firewall)

You may have fantastic fraud detection and response procedures, but how effective are your fraud prevention measures?

Would your employees be able to spot early warning signs of fraud? Would they recognise a phishing email? Do they understand the risks of poor passwords and working on unsecured Wi-Fi connections?

Once fraud or cybercrime has occurred, it can be difficult to reclaim the losses, and that’s why prevention is so important.

Frontline staff can be instrumental in highlighting vulnerabilities in your processes and suggesting ways to mitigate risk. And they can do this more effectively if they have received fraud awareness training and feel confident taking a proactive approach.

Using the home security analogy again, there is little point in investing in an alarm system if someone forgets to set it or leaves the front door wide open. These are basic human errors, so you first need to make sure that you have done everything you can to minimise this risk. You need to ensure your human firewall is as tight as can be.

Raising awareness of key issues

Meritec offers a range of “Focus On” courses to help businesses mitigate risk. These include:

  • Focus on Fraud Awareness
  • Focus on Cybercrime
  • Focus on GDPR
  • Focus on Risk Management

All our courses have been designed in collaboration with subject matter experts, with sector-specific courses for local councils, public sector organisations, schools, sports clubs and businesses of all sizes, with additional ‘spotlight’ modules available.

These courses are SCORM-supported so they can be integrated with your existing learning management system. Alternatively, you can benefit from Meritec’s fully customisable digital learning platform.

Through these courses, we’re already helping hundreds of businesses and organisations across the UK upskill their teams and improve organisational wellbeing.

If you’d like to see how our online learning platform and courses could benefit you, get in touch to book a demonstration.