● Statistics show that online crime increases during a recession
● In the UK, the 2008 recession caused a 2.1% fall in GDP and resulted a 7.3% increase in fraud offenses
● In the US, at the height of the recession in 2009, the Federal Bureau of Investigations’ Internet Crime Complaints Center received 336,655 complaints of online crime – a 22.3% increase from the previous year
● Monetary losses from digital fraud in 2020 are now 7.5 times higher than in 2009
Following a tumultuous few years, economies around the world are bracing themselves for a possible recession. With the World Bank downgrading its global growth forecast to 2.9% , many commentators see a global economic downturn as more of an inevitability, rather than a possibility. In response, SEON has released a new report, which examines how this unwelcomed scenario might affect levels of online fraud, as well as other forms of fraudulent activity and how businesses can best respond to the challenge.
The report, which is entitled ‘Global Recession Fraud’, assesses how economic downturns impact fraud rates, and identifies what businesses can do to ensure they’re protected against this threat. Using existing data sets compiled by the Association of Certified Fraud Examiners, as well as the Internet Crime Complaints Center, SEON makes the case that businesses across the globe should now plan for an impending uptick in online fraud attempts, which may begin happening on a larger scale than ever before.
Speaking on the report, PJ Rohall, Head of Fraud Strategy & Education at SEON commented: “It’s vital businesses recognize that multiple factors drive fraud attacks, therefore elements outside a global recession can have an impact. However, given the correlation between a rise in online fraud and periods of economic downturn, we wanted to investigate how a recession can impact businesses facing digital fraud. Our new report outlines this impact and provides businesses with some key tips to ensure they’re staying safe online.”
As well as establishing the link between periods of economic uncertainty and increases in online fraud, the ‘Global Recession Fraud’ report examines some of the nuances related to fraud during times of economic hardship. Notably, the report details how many smaller businesses often reduce spending on online fraud prevention and cybersecurity during times of recession. Unfortunately, this trend will not go unnoticed by fraudsters, thus further increasing the risk to such businesses in this difficult moment.
Thankfully, businesses like SEON can now deliver solutions that tackle this challenge head on. By offering rapid integration and pay-as-you-go flexibility, the company’s highly accessible and robust fraud prevention tool can be onboarded by companies of all sizes in a frictionless and efficient manner. In doing so, SEON can help companies with lower margins to tackle online fraud effectively, even in moments of economic strife. It’s part of the reason why the company has served over 5,000 merchants since its inception.