Impact of Fraud and Money Laundering
Published in October, the CIFAS Annual Report 2025 highlights the escalating fraud crisis in England and Wales. Fraud costs the UK an estimated £219 billion annually, with £81 billion impacting public services and £11.4 billion lost to consumer scams. The national surge of 4.2 million incidents intensifies both financial and emotional harm.
Fraud often serves as a gateway to money laundering, as proceeds from identity fraud, account takeovers and facility misuse are frequently laundered through bank accounts, fintech platforms and other financial channels. Organisations failing to detect and prevent these activities not only face financial loss and reputational damage, but also regulatory exposure under Anti-Money Laundering/Counter-Terrorist Financing (AML/CTF) obligations.
Common Fraud Typologies
In 2024, National Fraud Database filings rose by 13% to a record 421,000 cases. The Crime Survey for England and Wales (year ending March 2025) reported a 31% increase in fraud, reaching 4.2 million incidents and representing 43% of all recorded crime.
AI-driven threats, including deepfakes and synthetic identities, are increasingly common, with 80% of scams digitally enabled.
- Identity Fraud;
- Account Takeover;
- Money Muling;
- False Application; and
- Insider Threat.
Emerging threats include AI-powered tools like SpamGPT for scalable phishing, emotional AI manipulation (“vibe hacking”) and International Revenue Share Fraud in telecoms.
Barclays’ “Locking fraud and scams out” October 2025 webinar, quite interestingly raised issues including corporate risks such as CEO fraud, invoice diversion and bank impersonation via remote-access software. Moreover, a real-life incident was used as a case study, in which £3.95 million was nearly lost to fake CEO emails, halted by robust security checks.
Best Practices for Fraud Prevention
Fraud continues to rise sharply in the UK, with both financial and reputational impacts for organisations. Firms must adopt proactive measures such as, but not limited to the below, to prevent, detect and respond to fraud:
- Embed Real-time Intelligence Sharing;
- Strengthen Supplier and Third-Party Due Diligence Controls;
- Link Fraud Risk Assessment to AML Controls; and
- Develop internal and external communication strategies.
These measures support a holistic financial crime framework and help firms remain resilient in the face of increasingly sophisticated fraud threats.
Failure to Prevent Fraud Offence – Regulatory Update
From 1 September 2025, under the Economic Crime and Corporate Transparency Act 2023, large organisations can be criminally liable if they fail to prevent fraud committed by employees, agents or associated persons, as discussed in a previously published article.
This aligns with the regulatory approach of corporate criminal liability, as seen in other failure-to-prevent offences. Firms must implement reasonable fraud-prevention procedures across all business areas, including internal operations, third-party relationships and digital environments.
While this offence is not yet incorporated into the FCA Handbook, firms regulated under the Senior Managers and Certification Regime (SM&CR) should ensure accountability for fraud prevention measures is clearly assigned. For broader AML/CTF obligations, firms should refer to SYSC 6.1.1R (Systems and Controls) and SYSC 6.3 (Financial Crime).
How Complyport can help
With our international reach and sector-specific expertise, we are positioned to understand and address the unique challenges posed by Financial Crime, including Fraud. Complyport offers tailored solutions to strengthen AML and Fraud Systems and Controls and helping your organisation prepare for the new offence. Our services include:
- Fraud Risk Assessments and Gap Analyses
- AML Risk Assessments and Gap Analyses
- Financial Crime Systems & Controls review
- Policy Development
- Due Diligence support and assurance reviews
Book a meeting with one of our KYC/AML compliance experts to ensure you remain compliant and well-positioned in the evolving UK regulatory landscape.
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