Preventative spend: research 2018

Findings of a review of existing research and evidence on the financial costs of scams to the Scottish economy to identify and measure preventative strategies designed to reduce their impact. Research conducted by EKOS Economic and Social Research.

6. Conclusions

6.1 Conclusions

The brief set out the research requirements as follows:

  • to review evidence and develop an assessment of the cost to Scotland's economy of scams;
  • to identify existing preventative measures and strategies designed to protect people from scams, both in Scotland and across the UK;
  • where possible, to quantify the social and financial impacts of these preventative interventions; and
  • provide recommendations of interventions that are likely to offer the greatest return for preventative spend.

Our research conclusions against each of these is detailed below.

6.2 Cost of Scams

We would concluded that it is currently not possible to identify the "true cost" of fraud or scams as any data or estimates will vary significantly depending on the scope of the analysis and what is being counted, data sets being used and the method of data collection.

There are also issues around how robust the data is and the sources used to arrive at estimates or the assumptions used in their calculation. Our analysis has shown that:

  • different data sets include different types of definitions (e.g. only cyber);
  • some data includes individual and business and public while others do not;
  • some data is based on surveys with limited responses and unknown sample frameworks;
  • the data is based on that reported to the organisation publishing the data;
  • there are different levels of geographical coverage; and
  • it is not always clear which groups are included (individuals, businesses etc) or what is being counted.

However, it is important to be able to make some estimate as to the scale of the problem and based on the Annual Fraud Indicator report highlighted in Chapter 3, it was suggested that (at a minimum) the cost of fraud/scams to individuals in Scotland could be around £560 million.

However this excludes fraud/ scams on businesses, public sector or the charity/ third sector AND the cost of policing/ regulating/ addressing it AND the high level of unreported incidences. At a high level we would suggest that fraud/scams cost the Scottish economy many billions of pounds with the problem likely to continue into the long term.

6.3 Preventative Measures and Impact

The problem of scams/ fraud are well recognised and are already being addressed by a range of policy/ legislative organisations/ regulators/ individual sectors/ public sector/ Police and Crime/ support organisations and consumer groups.

As was highlighted earlier, there are a wide range and type of intervention already being delivered but again these a multi faceted some with particular target groups and some only dealing with particular types of fraud/ scam.

We do not intend to repeat the information provided in Chapter 5 which provides a comprehensive list of the kinds of interventions already under way.

We have been unable to find any evaluation evidence or monitoring of the effectiveness of current interventions which would allow us to comment on effectiveness.

Anecdotally, most of the organisations delivering preventative measures believe they are making a positive difference.

This is an issue which we return to in the next section of the report.

6.4 Recommendations

In considering recommendations it is clear that it will not be possible to totally eradicate fraud/ scam activity – so we start with a real challenge. As one interviewee said – "new laws or regulations won't stop the bad guys".

There is a strong view that it will not be possible to either legislate or regulate to fully address the issue and this must be complimented by preventative, awareness and education approaches.

Section 5.7 highlighted some of the approaches to mitigation which are currently being delivered together with how these might be expanded. In a more generic perspective we would suggest the following recommendations.

  • Scottish Scams Prevention Forum
    • provision of a "policy forum" for all interested organisations to come together and give a profile to activities. Roles could include:
      • co-ordinate activities
      • share best/ other practice
      • develop common language / messages
      • agree targeted approach for different groups
      • clarify roles and responsibilities
  • Better Understanding of the Problem
    • better quality data collection to understand the scale of the issue and changes over time
    • share data/ research
    • central repository for research
  • Measure effectiveness and impact
    • develop monitoring and evaluation protocols and framework
    • develop common set of indicators
  • Using technology
    • support for cyber technology development in Scotland
    • technology awareness
  • Engaging wider community
    • build on current activities through training front line staff
    • widen groups to include retailers and public sector



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