Nearly three-quarters of UK businesses have seen an increase in online fraud over the past year, with the majority of fraud professionals warning that it has negatively affected their company’s coffers.

That’s according to global identity verification firm Veriff’s latest report, The UK Fraud Industry Pulse Survey , which found that 73% of UK fraud experts and decision-makers have seen online fraud impact their revenues, with nearly one in ten (9%) reporting losses of between 10% and over 20%, while the majority (64%) lost between 1% and 9%.

Put into context, even a 5% hit on a revenue of £1 million represents £50,000, with Veriff claiming that the scale of the damage effectively amounts to a ‘fraud tax’ costing UK businesses millions every year.

Despite the alarming figures involved, the survey discovered that companies aren’t as well-positioned as they could be, with just 52% reporting they are ‘somewhat prepared’ to tackle increasing instances of fraud, even though more than 88% expect fraud to surge this year. 

“Many companies that haven’t yet suffered significant losses are confusing luck with preparedness,” said Iryna Bondar, senior fraud group manager at Veriff.

“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.”

The report highlights the growing danger of AI use by fraudsters, with most UK firms (61.5%) experiencing an increase in the use of AI in online fraud attempts over the last year, a trend witnessed around the world with Veriff’s global survey producing similar results in the US (60.5%) and Brazil (69%).

The most common AI-powered attacks range from malware (47.5%) and impersonation fraud (44%) to document fraud (31.5%) and third-party coercion (20%), with no single security measure providing adequate protection.

Amid growing reports of threat actors such as the ‘fake’ North Korean IT workers using AI to create synthetic identities, one statistic is especially alarming: nearly a quarter (24%) of UK firms say that between 11% and 25% of their monthly ID verification attempts are fraudulent, while 10% report that more than a quarter of all verifications are fraudulent.

However, UK businesses are responding in kind by adopting these emerging technologies into their own security structures, with 60% of firms already using AI and machine learning for fraud prevention, and another 25% planning to adopt similar tech within the next twelve months.

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Identity verification (IDV) and biometrics have emerged as critical components in fraud prevention strategies, with 80.5% of UK decision-makers already using these technologies in their security processes, while more than 78% plan to increase their use of these tools soon.

“As fraudsters become more sophisticated, businesses must respond with equally advanced defences or risk losing both revenue and customer trust,” said Bondar.

“These findings paint a stark picture of the growing financial threat that online fraud poses to British businesses. We’re seeing not just more fraud attempts, but increasingly sophisticated attacks that can bypass traditional security measures.  

“The most effective strategy combines multiple layers of protection to make attacks too costly and time-consuming for criminals.”