UK fraud volumes more than doubled to £2.3bn in 2023 – BDO says AI will see threat escalate

The volume of reported UK fraud grew to £2.3bn in 2023, which was the second-largest annual total recorded by BDO in the last decade and represented a 104% increase on 2022. However, more than half of it derived from just two long-running cases, BDO’s FraudTrack analysis shows.
The number of reported cases was also up by 18% this year to a three-year high, however it remains significantly below pre-pandemic levels. There is recognition in the report that the true levels of fraud will be higher than recorded, given that just one in seven fraud offences are reported.

The most common fraud types reported were corruption, tax fraud, third party fraud, unauthorised use/misuse of assets and money laundering. However, cybercrime was among the key trends identified, where the report includes the following observations: 

  • AI is blurring the lines between what is real and fake. Just months after ChatGPT’s launch, cybercriminals created their own version and several new fraud related chatbots have been observed on the dark web. These tools can enhance fraudsters ability to write malware or phishing emails;
  • New products or natural disasters create opportunities for fraudsters and there have been fake adverts for ChatGPT. 

Fraud hotspots include London and the South East, which saw a 170% increase in reported fraud value. The second most prevalent region is the East Midlands, which last year moved up from 12th to 2nd position. For the first time in over five years, Yorkshire is ranked in the top five hot spots.  

Looking ahead, Vijay Velu, BDO’s global head off offensive security, said: “Foreseeing 2024, cyber threats know no boundaries. We predict an escalation in cyber fraud complexity, with fraudsters exploiting the rise of AI and deepfake tools. There is an intensifying dependency on digital interfaces, particularly with mobile networks, cloud, and financial services. All types of businesses are expected to be a magnet, (including charities) for sophisticated social engineering and evolved ransomware threats. As digital fraud becomes increasingly sophisticated, there is a pressing need for equally sophisticated cyber security strategies to effectively counter these emerging threats.” 

FraudTrack data analysis is based on all reported fraud cases across the UK with a monetary value of over £50,000 from 1 December 2022 to 30 November 2023.  

The two largest cases were the £585m settlement of a bribery case at gambling conglomerate Entain and a tax evasion case involving Bernie Ecclestone in which he paid £650m to authorities.  

You can download the report here.