UK shoppers could face a surge in scam attempts ahead of Black Friday and Christmas, warns new research from global fraud and financial crime prevention company, Featurespace.

As we approach Black Friday and the festive shopping period, nearly half (46%) of people see an increase in scam attempts around peak holiday times, with seven in ten (70%) stating they feel nervous about how sophisticated fraud techniques are becoming.

With an expected spike in the number of online purchases around Black Friday and Christmas, consumers must be increasingly wary of scam attempts. Research shows that UK shoppers spent almost £10 billion online during the run-up to Black Friday (1st-24th November) last year, up by 4.7% from 2022*.

Featurespace’s research also shows that more than half (55%) of people have seen an increase in scam attempts in the last 12 months and three in ten (30%) UK adults have been a victim of financial fraud over the same period.

According to UK Finance, over £570 million has been stolen by fraudsters in the first half of 2024.

Figures from the National Crime Agency indicate that fraud is now the most common crime in the UK, accounting for 40% of all offences recorded in England and Wales.

Dave Excell, Founder of Featurespace, comments: “Fraudsters choose busy shopping moments such as Black Friday or the run-up to Christmas when consumer spending peaks to target unsuspecting victims.   

“Peak periods such as Black Friday sees retailers competing for the best discounts to attract buyers, providing the perfect opportunity for scams to also include ‘too good to be true’ offers to lure victims in the noise of the other offers, or with a last-minute gift or a popular item that’s quickly sold out. With this change in consumer behaviour comes increased spending and higher value purchases.”

"To combat this, banks are investing in advanced anti-fraud measures and AI technologies to proactively identify and prevent fraudulent transactions, analyzing billions of transactions to stay ahead of evolving scam tactics."

Threat of social media scams on the rise

The growth in retail sales through social media platforms is also causing concern for making shoppers more susceptible to fraudsters.

Research from Retail Economics and TikTok shows that 56% of UK users have made a purchase directly through social media with the social ecommerce industry worth £7.4 billion – forecast to rise to almost £116 billion in 2028.

Featurespace’s research found eight in ten (80%) people are now more cautious about potential fraud or scams on social media platforms and 82% believe that social media companies should do more to stop fraudulent transactions.

Enhanced cross-sector collaboration will help fight fraud. Featurespace is the latest signatory to an anti-fraud coalition led by consumer group Which? alongside leading financial institutions and telecoms providers to prioritise industry data sharing to enhance security measures and tackle fraud.

As scams become more complex, almost six in ten people (57%) appreciate banks providing additional information on safeguarding against financial fraud and scams. This advice for customers can be supported by the banks’ use of technology and AI to enhance consumer protections, mitigate risk and reduce losses.

Dave Excell adds: “With enhanced anti-fraud protection, comes the need that these solutions don’t slow transactions down or decline genuine payments - which impact customer experience. This is where AI holds the key – by utilising behavioural data, AI solutions empower financial institutions to identify and prevent unusual or fraudulent transactions in milliseconds while protecting consumers and considerably reducing losses for everyone affected.”

Featurespace provides innovative solutions using AI and machine learning to help banks and financial institutions crack down on fraud. It has built a model optimised for real-time data analytics, capable of recalibrating in real-time to identify and prevent both existing and new forms of fraud.

Featurespace has worked with NatWest for five years and helped to improve its scam detection rate by 135% and reduced false positives for scams by 75% during that time - enabling genuine transactions to be processed quicker, saving both costs and processing time whilst offering enhanced protection for consumers.