The Rapid Rise of Consumer Fraud: Key Focus Areas for Public Safety Authorities

As the volume and impact of consumer fraud grows, it remains vital to rise to the challenge of collecting and analyzing larger amounts of data to disrupt and detect fraud.

As we all know, digital adoption by consumers, businesses and government has accelerated over the past two years. With the pandemic and associated lockdowns and new arrangements for remote and hybrid work, years of digital innovation were packed into a few months. For all the benefits of improving productivity, expanding access to services and helping consumers connect in new ways, the trend has also led to a dramatic increase in fraud targeting individuals directly.

a new report notes that the growth in consumer fraud in the US and a number of other countries during the pandemic years 2020-2021 has outpaced the aggregate increase over the past six years. In addition, the fraud grew in both variety and scope.

With more people than ever falling victim to the financial and psychological damage caused by fraud, public safety organizations are challenged to change their tactics and operations to keep up with criminals. The question is, what’s the best way for public safety authorities to move forward?

The answer depends on the agency’s level of oversight (ie, national versus local), business model (ie, federal versus centralized), the nature of the technology deployed or available, local laws, and the breadth of the partner networks. But regardless of jurisdiction and appropriate responsibilities for protecting individuals from fraud, more attention should be paid to updating approaches within three aspects of the operational response to fraud: preventing and disrupting, gathering and analyzing information, and detecting and investigating. The update should promote four opportunities that are relevant across the response framework, with a focus on citizens, partners, the workforce and technology.

Also see: How digital trust can overcome the impact of fraud on the CX

Prevent and disrupt

Given the speed, complexity and international nature of much consumer fraud, it is important to focus on prevention and disruption. Here are some ideas:

  • citizens† Educational campaigns need to be informed and improved through data analytics. Since most fraud takes place online, campaigns must be deployed and executed digitally, with a focus on the most vulnerable groups.
  • partners. Coordinate efforts with partner agencies to fund joint activities and encourage data sharing where possible. Roles and functions may need to be updated to forge relationships with relevant private sector organizations and to make better use of social media, telecommunications and financial institutions to prevent fraud.
  • workforce† Work with partners and law enforcement agencies to upgrade skills and build capacity. Better cooperation between the police and the business community can, for example, support prevention and disruption activities.
  • Technology† Automation technologies can be used to speed up fraud response processes, such as freezing accounts when a suspicious transaction occurs. Meanwhile, artificial intelligence (AI) tools can help researchers track down fraudsters targeting social media sites.

Collect and analyze information

Improving the collection and analysis of intelligence (namely data) should strengthen the identification of fraud patterns. In addition, as the volume and impact of consumer fraud increases, it remains vital to rise to the challenge of collecting and analyzing larger amounts of data to disrupt and detect fraud. Examples of agency initiatives include:

  • citizens† Help people report fraud through the channel of their choice, assess vulnerabilities and provide advice to mitigate damage and minimize repeat casualties. Ideally, citizens should report fraud only once through a single point of contact reaching public safety authorities and relevant partner organisations.
  • Partners† Connect intelligence gathering with private sector agencies and partners at the national and international levels to improve understanding of the threat landscape. Multilateral organizations, such as Interpol, can sometimes help by providing information and support to fill gaps in agency programs and data.
  • workforce† Look to automation to reduce the burden of repetitive, bulky administrative tasks. This allows employees to analyze larger amounts of data using a series of visualizations, improving the employee experience and increasing engagement.
  • Technology† Apply new and emerging technologies to advance intelligence and analytics. In particular, AI and advanced analytics, powered by the cloud, can help agencies track threats across all parts of the digital world, including the dark web.

Detect and Investigate

Detecting possible cases of fraud and gathering evidence for prosecution is a core activity of certain public security authorities. However, given the scale of the fraud, this is an increasingly difficult mandate to fulfill. The following steps may help:

  • citizens. Agencies should consider communicating with victims of fraud during an investigation and providing updates on the progress of cases and the results achieved. Such communication would ideally also help reassure victims that they are safe.
  • Partners† Cohesive police investigations should be conducted to maximize shared resources and ensure seamless coordination of cross-border investigations. Here, existing organizations (eg Interpol) provide useful platforms for collaboration, as well as relationships with private sector partners through apprenticeships and work exchange programs.
  • workforce† By providing ongoing skills opportunities around fraud investigations, agencies can help attract and retain talent while improving investigation quality. In addition, agencies should consider deploying citizens to increase police resources for specialist capabilities and to support investigations.
  • Technology. AI and machine learning technologies offer important opportunities to automate case prioritization and identify lines of inquiry. By leveraging common data models, cloud and APIs to enable interoperability between systems, agencies can better connect studies and quickly share insights and developments with their partners.

With consumer fraud on the rise, there is a clear need to address the challenge with greater urgency. That means developing new approaches and processes for citizens, partners, staff and technology to support the anti-fraud missions of public security authorities. Consumer fraud poses a significant threat to citizens, to trust in public safety agencies and ultimately to economic and national security. Addressing this must be a collective priority for governments, public safety authorities and their citizens, and relevant business partners, and there are countless opportunities to do this more aggressively and effectively.

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