Dangers of a Recession: The Rise of Digital Fraud And Customer Dissatisfaction
4 min

Dangers of a Recession: The Rise of Digital Fraud And Dissatisfaction 

Entering 2023, it’s clear to see that the recent economic downturn is heavily affecting people across the UK. With the economy not expected to regain pre-pandemic size until the middle of 2024, there are still several months of challenges, including a cost of living crisis, heightened unemployment rates and decreased consumer spending.

As individuals lose their jobs and face financial instability, criminals take advantage, leading to an unfortunate rise in digital fraud.

Research from the Office for National Statistics highlights that the majority of crime (including burglary, theft and knife crime) has fallen since March 2022, with digital fraud being the only type of crime to rise.

Digital fraud is when threat actors attempt to steal personal information or money from individuals and businesses over the internet. It can take many forms, with some common types including:

  • Phishing scams: Using fake emails, websites, or social media messages, cybercriminals try to trick people into clicking malicious links or giving away personal information, such as login credentials or credit card numbers.
  • Malware attacks: Malware is software designed to damage or gain unauthorised access to a computer or network. Malware attacks can be used to steal sensitive information, disrupt operations, or hold data for ransom.
  • Identity theft: Identity theft occurs when someone uses another person's personal information, such as their name or address, to commit fraud or other crimes. Criminals may use this information to open new accounts, apply for loans, or make purchases in the victim's name.
  • Online auction fraud: Online auction sites can be a convenient way to buy and sell items, but they can also be a breeding ground for fraud. Criminals may use fake or stolen accounts to list items for sale, or they may send fake payment requests to trick people into sending money.

During a recession, vulnerable individuals are more likely to fall for schemes that promote easy investment opportunities, cheap deals, or job openings in attempts to improve their situation.

Crowd in the UK during recession

We also find that some individuals are more likely to start engaging in criminal activity themselves when their financial situations become dire enough. Both circumstances feed into this growing level of digital fraud.

When considering organisations as a whole, they are equally at risk of becoming victims of digital fraud during periods of recession. With companies under significant financial pressure and working with reduced staffing, cybercriminals have the option to target employees individually to gain information or access to accounts, or they can attack the business servers directly and hold data for ransom.

However, businesses don’t just have cybercriminal activity to worry about – their customer satisfaction and retention rates are on the line too.

Recently, there have been thousands of staff cuts across organisations such as Spotify, Amazon and Meta, with more and more businesses being forced to reduce their workforce to minimise costs and stay afloat. One example of an area that will experience a heavy reduction in headcount is call centres or customer support teams - due to their significant overhead expenses and large pool of human operators.

While reducing staff will cut costs in the interim, this will introduce a host of negative consequences for both the business and its customers. For the business, it can lead to a decline in customer satisfaction and an increase in operational costs. For customers, it can lead to longer wait times, difficulty reaching customer service representatives, and a reduction in the overall quality of service. These all add up to declining customer loyalty and a further decrease in turnover.

In order for individuals and businesses to protect themselves from digital fraud during this time of economic uncertainty, the protection of digital assets and personal information should be prioritised.

Professionals looking at graph on computer in office

As part of this, staff should be made aware of online risks, so that they can remain alert to suspicious emails and refrain from clicking on links or downloading attachments from unknown sources. It is also vital that strong and unique passwords are used for all online accounts, and that these are regularly updated to keep them secure. Finally, businesses should consider onboarding technology to improve cybersecurity and boost operational efficiency during periods of reduced staffing.

When considering tackling risks such as phishing, malware and identity theft, a good place to start is the introduction of a secure communication solution. By utilising encryption and authentication capabilities, solutions such as our Mailock software are specifically designed to secure internal and external customer communications, especially when they contain personal information that would be harmful in a cybercriminal’s hands.

Secure email solutions also offer a quick and convenient point of contact for customers to reach businesses, as well as being an efficient tool for call centre staff, allowing them to send sensitive information and documentation to customers quickly without relying on expensive print, pack, and post.

While we weather the storm of this recession, improving your cyber capabilities will not only protect you from the heightened risks of digital fraud but offer a host of other benefits that will last far longer than this period of economic downturn.

Further Reading


Originally posted on 26 01 23
Last updated on December 21, 2023

Posted by: Sabrina McClune

Sabrina McClune is an expert researcher with an MA in Digital Marketing. She was a finalist in the Women In Tech Awards 2022. Sabrina has worked extensively with B2B technology companies conducting and compiling thorough academically driven research to produce online and offline media. She loves to read fantasy novels and collect special edition books.

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