Criminals stole £571.7m through unauthorised and authorised fraud in the UK, a 1.5 per cent fall compared to the first half of 2023, according to a banking trade association.
Ben Donaldson, Managing Director of Economic Crime at UK Finance, said: “Fraud continues to pose a major threat in this country with over £570 million stolen through payment fraud in the first half of the year. In addition to the financial impact, this crime can cause severe psychological harm to victims.
“This isn’t a fight we will win alone as our data again shows that most fraud originates online and via telecommunications networks. There have been some improvements made by other sectors, but their actions don’t yet fully match the scale of the problem – more needs to be done to prevent fraudsters exploiting these platforms and networks.
“Earlier this month we saw the introduction of new APP reimbursement rules for customers and while reimbursement is important in the fight against fraud, it can only be part of the solution. On its own it does nothing to prevent or reduce the psychological harms to victims, nor does it prevent organised crime groups from stealing money. That is why the financial services industry is always focused on preventing fraud happening in the first place.
“Criminals will keep adapting, which means we all need to remain focused on reducing fraud and thereby protect customers and society from the adverse effects of this awful crime.”
According to the trade body, losses due to unauthorised transactions across payment cards, remote banking and cheques were £358m in the first half of this year, an increase of five per cent. The total number of recorded cases was just over 1.5 million, an increase of 19 per cent. One of the main reasons for suchfraud losses was a 26 per cent increase in ‘card not present’ cases, the trade association said.
The trade body also saw a 13 per cent increase in the amount of unauthorised fraud prevented – up to £710.9m. Victims of unauthorised fraud cases such as these are legally protected against losses, UK Finance pointed out. Authorised push payment (APP) fraud losses were £213.7m, down 11 per cent compared with the first half of last year. This comprised £166.5m of personal losses and £47.2m of business losses.
The total number of APP cases was down 16 per cent to 97,344, and falls in case numbers came across all categories of APP fraud. As for the sources of APP fraud, most, some 72 per cent of such cases originated online. These cases tend to be lower-value scams, such as purchase scams.
Purchase scams, where a victim pays in advance for goods or services that are never received, fell by 11 per cent. Romance scams, where victims are tricked into believing they are in a relationship, fell by seven per cent and investment scams also fell in cases by 29 per cent. Fraud cases where criminals impersonate a bank or the police and convince someone to transfer money to a “safe account” fell by 32 per cent and the amount lost to this type of fraud fell by 26 per cent.
UK Finance is holding its Economic Crime Congress 2024, on December 12 in London.
Comment
Arun Kumar J, Regional Director at ManageEngine said: “The new fraud regime is a huge shift in the fight against fraud. Payment service providers will now shoulder responsibility for identifying and preventing push payment fraud. Something that won’t be easy. Fraudsters are smart, using advances in technology to create highly customised and convincing scams.
“To stay one step ahead, payment companies will need to adopt a belt and braces approach. Traditional “know your customer” controls and transaction monitoring will need to incorporate powerful AI and machine learning technologies.
“By strengthening lines of defence with actionable insights and analytics-driven intelligence, payment providers will be able to identify and stop scams at machine speed – protecting customers and proactively limiting the volume of payouts that will be due under the mandatory reimbursement scheme.”
