Cost of Living Crisis; Will it Lead to More Fraud in Business & Finance?

The cost-of-living crisis is causing a serious issue for both businesses and individuals with a fall in “real” disposable income meaning that many people are struggling to afford basic items.

This cost-of-living crisis has emerged from a perfect storm of factors, including the fallout from COVID-19, the war in Ukraine, and disruptions to the global supply chain. As a result of all of this, it is thought that fraud could become a bigger issue in the coming months and the Financial Ombudsman has already reported a sharp increase in complaints.

Types of Fraud

There are many different types of fraud to be wary of with cases currently on the rise. These include criminals posing as a customer’s bank and getting them to move money to a “safe” account as well as people buying items online but not receiving the goods that they order. Cryptocurrency scams are also increasingly common, and it is thought that these are mainly driven by social-media-based scams that take advantage of people looking to make money quickly (something many are trying to do during the cost-of-living crisis).

Another type of fraud to be wary of that is not online is MOT fraud. From 2021 to 2022, there were 1324 cases of MOT fraud and this can result in dangerous cars being on the UK roads putting all road users at risk. MOT fraud involves either qualified MOT testers not doing their job by giving certificates to vehicles that should have failed or even cars that have not been tested. In some cases, there are examples of MOT testers taking bribes for certificates. This is why you should always research testing centers ahead of getting your MOT and book MOT online from a trusted tester.

What Can Businesses do?

So, what can businesses do to prevent fraud from being an issue during the cost-of-living crisis? Preventing fraud will involve having robust processes in place, providing staff training, and using high-quality cybersecurity products to prevent cyber-attacks. You can also conduct regular audits to identify any potential vulnerabilities and to ensure that all processes are watertight and secure. Business owners should also pay attention to the news and look out for the latest scams.

The cost-of-living crisis is creating a serious issue for both individuals and businesses in 2022 and it could be a tough period ahead for many. Not only is the cost-of-living crisis stopping people from spending, but it is also having a knock-on effect in terms of fraud and scams. It is important to educate yourself and be wary in the months ahead so that you know what the common scams are and what steps can be taken to protect yourself. 

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