Nearly three-quarters (72.5%) of UK businesses have seen an increase in online fraud over the past 12 months, according to a new survey commissioned by Veriff. The global identity verification firm's UK Fraud Industry Pulse Survey, which polled 200 fraud professionals across financial services, technology, and retail sectors, reveals a rapidly evolving threat landscape with significant financial implications.

The financial impact is substantial, with 73% of UK fraud professionals reporting that online fraud has negatively affected their company's revenue in the past year. For almost two-thirds (64%) of businesses, this translated to revenue losses between 1% and 9%, effectively a ‘fraud tax’ costing them millions annually. More alarmingly, one in ten UK businesses (9%) reported losses ranging from 10% to more than 20% of annual revenue.

“These findings paint a stark picture of the growing financial threat that online fraud poses to British businesses,” said Iryna Bondar, Senior Fraud Group Manager at Veriff. “We're seeing not just more fraud attempts, but increasingly sophisticated attacks that can bypass traditional security measures.”

The survey uncovered a dangerous paradox in fraud preparedness. While 22% of UK companies reported no revenue losses to fraud—seemingly positive news—an overwhelming 88.5% expect fraud to surge in 2025. Yet despite this anticipated threat, 52.5% admit being only “somewhat prepared” against these attacks.

“Many companies that haven't yet suffered significant losses are confusing luck with preparedness,” explained Bondar. “This complacency, not strength, leaves them particularly vulnerable as AI-driven threats rapidly outpace legacy security tools. It's not a question of if they'll be targeted, but when.”

For 24% of UK businesses, 11-25% of monthly ID verification attempts are fraudulent, and 10% of companies report that fraudulent attempts exceed 25% of all verification volume. This vulnerability is particularly worrying amid the rise of “identity factories”, where criminals use AI to mass-produce synthetic identities.

With 61.5% of UK businesses reporting an increase in AI-powered attacks and facing diverse threats ranging from malware (47.5%) and impersonation fraud (44%) to document fraud (31.5%) and third-party coercion (20%), no single security measure provides adequate protection.

Businesses are responding by adopting advanced technologies. Sixty per cent of UK organisations are already using AI and machine learning for fraud prevention, with another 25% planning to adopt these technologies within the next 12 months. Identity verification (IDV) and biometrics have emerged as critical components in fraud prevention strategies, with 80.5% of UK decision-makers already incorporating these technologies into their security processes. Looking ahead, 78.5% plan to increase their use of these tools in the coming year.

Customer expectations are also driving the need for stronger defences, with 71% of UK respondents reporting that customers are increasingly demanding robust fraud prevention capabilities. “As fraudsters become more sophisticated, businesses must respond with equally advanced defences or risk losing both revenue and customer trust,” added Bondar. “The most effective strategy combines multiple layers of protection to make attacks too costly and time-consuming for criminals.”

The global nature of these threats is evident in parallel surveys conducted by Veriff, which revealed strikingly similar patterns in the US and Brazil, with 72% of US and 70% of Brazilian respondents also reporting increased fraud.