The UK finance sector is seeing worrying rise in online and technology-enabled scams that evade banks’ security systems and use digital platforms to target victims directly, tricking them into giving away their money or information, warns the industry body UK Finance.
Criminals are advertising fraud and scam services for sale online, including template phishing websites and custom-built scam apps which replicate real banking apps, the association adds.
Katy Worobec, Managing Director of Economic Crime at UK Finance, said: “We urge the government to use the upcoming Online Safety Bill to ensure online platforms take action to protect customers by taking down scam adverts on search engines, removing fake profiles on online dating websites and tackling fraudulent content on social media. It cannot be right that online firms are effectively profiting from fraud, while society as a whole pays the price.”
Impersonation scam cases, in which criminals impersonate trusted organisations to trick victims into handing over their money, almost doubled to 39,364 cases in 2020, the largest increase of all scam types. During the pandemic, criminals sent fraudulent emails claiming to offer government support to those impacted by the pandemic and scam text messages requesting payments to book a Covid-19 vaccine. They also impersonated delivery companies to exploit the rise in online shopping.
There was a 32 per cent increase in investment scam cases last year, which are often promoted through adverts on search engines offering higher than average returns, and a 38 per cent increase in cases of romance scams, driven by the rise in online dating during the pandemic.
Authorised Push Payment (APP) fraud cases, where customers are tricked into authorising a payment to another account controlled by a criminal, increased by 22 per cent to almost 150,000 in 2020. Losses amounted to a total of £479 million, up five per cent on the previous year.
Investment scams, in which a criminal convinces their victim to move their money to a fictitious fund or to pay for a fake investment, saw the highest increase in losses of any APP scam type, totalling £135.1m. Lockdown restrictions have caused criminals to turn away from more traditional forms of fraud, the stats suggest.
Contactless card fraud losses fell by 22 per cent to £16m, the first annual fall since this data started being collected in 2013. This is likely to be related to lockdown limiting opportunities for criminals to commit contactless fraud using lost and stolen cards. Likewise cheque fraud losses saw a significant fall of 77 per cent to £12.3m.
