Fraud and Financial Inclusion in the UK

This project explores links between fraud victimisation and financial inclusion in the UK, and how anti-fraud policies affect people’s ability to stay financially included.

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Introduction

Fraud makes up around 40% of all crime in the UK. Statistics from the Crime Survey of England and Wales reported a total of 4.1 million incidents of fraud for the year ending 31 December 2024, an increase of 33% from the previous year. Payment fraud losses totalled £1.2 billion in 2023 according to UK Finance.

Fraud disproportionately impacts the most vulnerable in society. According to a survey by the Social Market Foundation in 2024, 17% of victims of payment fraud between 2020 and 2023 had an annual income of less than £20,000 with an average loss of £3,512 per fraud incident. Low- and middle- income households may be more vulnerable in becoming victims of fraud due to greater financial pressures and the fraud may have a disproportionate impact on their resources and ability to meet their financial needs.

Current research tends to frame vulnerability through a narrow lens, primarily focusing on demographic characteristics such as age and disability rather than socio-economic status of victims. This has resulted in a narrow understanding of how fraud affects low- and middle-income households and of how current anti-fraud policies or interventions may impact these groups’ continued access to financial services.

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Aims and objectives

This project aims to fill a research and policy gap by:

Examining the victimisation and impact of fraud on low- and middle-income households.
Assessing the impact of victimisation on victims’ trust and inclusion in the financial system.
Evaluating whether and how policy interventions (such as reimbursement) impact trust and financial inclusion.