Unauthorised fraud (where the victims are legally protected against losses) in 2021 fell by 7pc to £730.4 m, says the trade association UK Finance in its latest annual report on fraud – but authorised fraud (where someone pays money from their account, whether conned in a romance fraud or by a scam invoice, or by a criminal impersonating the CEO, among other cons) went up 39 per cent, £583.2m.
To take authorised push payment (APP) fraud as an example; here the customer is tricked into authorising a payment to an account controlled by a criminal. In 2021, criminals impersonated a range of organisations such as the NHS, banks and government departments via phone calls, text messages, emails, fake websites and social media posts to trick people into handing over their personal and financial information. They then used such information to convince people into authorising a payment.
There were 195,996 incidents of APP scams in 2021 with gross losses of £583.2m, including:
– £214.8 million lost to impersonation scams, whereby criminals impersonate a range of organisations to trick people into giving away their personal and financial information. This was the largest category of APP losses.
– £171.7 million lost to investment scams, the second largest category of APP losses.
– 99,733 cases of purchase scams, which means this was the most common type of scam – accounting for 51 per cent of all cases – although total losses were £64.1 million.
A total of £271.2m of losses were returned to victims of APP scams, accounting for 47 per cent of losses.
Katy Worobec, managing director of Economic Crime at UK Finance, said: “Fraud has a devastating impact on victims and the money stolen funds serious organised crime, as well as imposing significant costs on the wider economy. Unauthorised fraud losses fell last year, but this type of criminal activity remains a major problem. Through the introduction of new measures such as strong customer authentication, coupled with continued investment in technology, the banking and finance industry prevents significant amounts of fraud from taking place.
“Authorised fraud losses rose again this year as criminals targeted people through a variety of sophisticated scams, with much of the criminal activity taking place outside the banking sector, often involving online and technology platforms. This is why we continue to call for other sectors to play a greater role in helping protect customers from the scourge of fraud.
“The upcoming Economic Crime and Corporate Transparency Bill is an important development and provides the opportunity for the government to give new powers on information sharing and tracking stolen money. These are things we have long called for and will support efforts to work together and stop the fraud happening in the first place.”
UK Finance commented that it and its members have long been calling for greater cross-sector action to tackle the problem of fraud done online and through tech platforms.
Comment
On the APP losses, Rocio Concha, consumer advice group Which? Director of Policy and Advocacy, said: “These latest figures expose the shocking scale at which people are experiencing APP scams, and are even more stark amid the current cost of living crisis. Yet all too often victims face a reimbursement lottery depending on who they bank with.
“The government has announced its intention to enable mandatory reimbursement for bank transfer victims who are not at fault and this needs to be brought in as soon as possible. The Payment Systems Regulator must be ready to ensure that firms are treating customers fairly and consistently, and prepared to take enforcement action against those who breach the rules.”
