The evolution of a fraudster: Staying one step ahead in a digital world

17 April 2025 / 4 min read

Fraudsters are constantly evolving, but while their tools have changed, their underlying drivers are remarkably consistent. Detective Chief Inspector Tom Hill, of the City of London Police’s Insurance Fraud Enforcement Department (IFED), offers a deep dive into what fraud looks like today and where it might go next.

Fraud is no longer simply a growing threat; it’s the most common crime in the UK today.^[1]From crude scams to sophisticated, technology-enabled schemes, fraudsters are using inventive techniques as they attempt to stay ahead of detection. Within the insurance sector alone, 84,400 fraudulent claims were filed in the UK last year, valued at £1.1 billion.^[2]

These themes were in focus at the Verisk Insurance Conference 2024, where Detective Chief Inspector Tom Hill, of the City of London Police’s Insurance Fraud Enforcement Department (IFED), offered an eye-opening perspective on how fraudsters are staying ahead – and what insurers can do to catch up.

As Hill highlighted, the drivers of fraud haven’t changed since its earliest recorded cases, which date back to 300BC when a pair of Greek merchants sank their own ship in an attempt to defraud their insurer. While the tools of the trade have evolved, the drivers remain the same: incentive, opportunity and rationalisation. From ancient history to cutting-edge cybercrime, the solution lies in staying agile to stay ahead.

The changing face of fraud

Fraudsters have always been imaginative, but the past decade has seen an acceleration in the sophistication of their tactics. In 2023 and 2024 alone, there were more than 1.3 million recorded fraud cases in the UK, an 8% rise from the previous year.^[3] Even more alarming, 67there were over ,^[4]showing just how much the digital world is shaping fraud’s evolution.

“Fraud is now 41% of all crime,^[5]and yet only about 13% of fraud is reported,”^[6]said Hill during the session. “You’re more likely to be a victim of fraud than any other type of crime, and yet the resources to tackle it are severely lacking.”

Insurance fraud alone was valued at more than £1 billion last year, with schemes becoming ever more varied and complex. From doctored documents in motor claims to falsified death certificates in life insurance, fraudsters are expanding their tactics.

Hill shared an example where a claimant submitted a falsified photograph of minor vehicle damage, hoping to collect a payout. “What we’re finding,” Hill said, “is that while the low-sophistication frauds are still common, the technology that helps criminals execute these frauds is advancing quickly.”

A technological arms race

As much as technology has enabled fraud, it also holds the key to combatting it. Fraudsters are already using artificial intelligence (AI), deep fakes and other advancements to falsify documents and carry out hoaxes – and the arms race between fraudsters and fraud detection technology is now slowing down.

“Where we once saw low-sophistication scams with obvious errors, like badly photoshopped images, we’re now seeing much more sophisticated tactics,” said Hill. One example he shared involved a £130,000 insurance fraud case, where a woman fabricated a letter from a hospital claiming she had cancer. The technology she used to create the fake document was sophisticated enough that it almost passed as real – but closer examination with similar AI technology revealed the hoax.

What worries both law enforcement and fraud victims is the future, where AI could be used to generate highly convincing deep fakes of audio and video, making it even harder to discern fact from fiction. Hill warned: “We’re anticipating large language models to scale up fraud activities, probably at minimal investment for the fraudster.”

The human element

Despite all these technological advances, Hill reminded the audience that fraud ultimately relies on human behaviour. Whether by exploiting vulnerable people through romance scams or manipulating individuals within an organisation, the human element is always at play.

For internal fraud, lack of oversight and poor controls continue to be significant risk factors – 32% of internal frauds occur due to a lack of controls, while 19% happen because existing controls are overridden.^[7]This indicates that insurers not only need to bolster their digital defences but also strengthen their internal oversight to reduce fraud risks.

“Incentive, opportunity and rationalisation – these are the three things that need to be in place for fraud to occur,” Hill said. In insurance, rationalisation often comes from customers believing they’re owed something because they’ve paid premiums without ever making a claim. Building trust with policyholders may therefore be a key mitigating factor.

The road ahead

The evolution of a fraudster is not just about technology or new scams. It is about the core motivations that drive people to commit fraud and how these motivations intersect with new opportunities and tools. Insurers and law enforcement need to be agile to anticipate future threats, especially as AI makes it easier for fraudsters to operate at scale.

Hill summed it up best: “From 300BC to today, the technologies facilitating fraud have changed, but the motivations remain the same. It’s up to us to ensure we match fraudsters’ agility and stay ahead.”

See for yourself the technology we have developed to stay ahead of the evolving frauster. Find out more here.

[1] https://www.nationalcrimeagency.gov.uk/what-we-do/crime-threats/fraud-and-economic-crime#:~:text=Fraud%20is%20the%20most%20commonly,crime%20in%20England%20and%20Wales.

[2] https://www.abi.org.uk/news/news-articles/2024/9/no-let-up-in-crack-down-on-insurance-cheats-as-industry-detects-1-billion-worth-of-fraudulent-claims/

[3] National Fraud Intelligence Bureau (NFIB) Annual Threat Assessment

[4] National Fraud Intelligence Bureau (NFIB) Annual Threat Assessment

[5] https://www.gov.uk/government/publications/economic-crime-and-corporate-transparency-act-2023-factsheets/economic-crime-and-corporate-transparency-act-failure-to-prevent-fraud-offence#:~:text=Fraud%20is%20the%20most%20common,the%20year%20ending%20September%202022.

[6] https://www.nationalcrimeagency.gov.uk/what-we-do/crime-threats/fraud-and-economic-crime

[7] https://www.acfe.com/-/media/files/acfe/pdfs/rttn/2024/2024-report-to-the-nations.pdf