Total losses to fraud fell by 5 per cent to £731.8m according to the latest data from UK Finance, the finance and banking industry trade association. Losses due to unauthorised transactions on payment cards fell 8 per cent year-on-year to £566m. The trade body says that the banking industry helped prevent £984.9m in attempted unauthorised card fraud.
Losses due to unauthorised remote banking fraud totalled £156.1m, a 14 per cent rise on 2016. Banks prevented £261.4 million of unauthorised remote banking fraud, 27 per cent more than last year. Cheque fraud losses fell 28 per cent in 2017 to £9.8 million. This is the lowest annual total on record. £212.3 million of attempted unauthorised cheque fraud was prevented. There were 1,910,490 reported cases of unauthorised financial fraud, a rise of 3 per cent compared to the year before.
The new authorised push payment scams (also known as APP or authorised bank transfer scams) data, collected for the first time in 2017, show losses of £236m through such scams in 2017. There were 43,875 reported cases; 88 per cent of this total were retail consumers, losing an average of £2,784, and the remainder were businesses who lost on average £24,355 per case. Financial providers were able to return £60.8m (26pc) of the authorised push payment scam losses in 2017.
Katy Worobec, Managing Director of Economic Crime at UK Finance, said: “Fraud is an issue that affects the whole of society, and one which everyone must come together to tackle. The finance industry is committed to playing its part – investing in advanced security systems to protect customers, introducing new standards on how banks respond to scam victims, and working with the Joint Fraud Taskforce to deter and disrupt criminals and better trace, freeze and return stolen funds.
“We are also supporting the Payment Systems Regulator on its complex work on authorised push payment scams, providing the secretariat for its new steering group. It’s a challenging timetable, but it is important that we get it right to stop financial crime and for the benefit of customers.”
In 2017, fraud losses on payment cards fell 8 per cent year-on-year to £566m. At the same time, card spending increased by 7 per cent, meaning card fraud as a proportion of spending equates to 7.0p for every £100 spent – the lowest level since 2012. In 2016 the figure stood at 8.3p.
About APP fraud
In an authorised push payment (APP) scam, the account holder themselves authorises the payment to be made to another account. If a customer authorises the payment themselves, current legislation means that they have no legal protection to cover them for losses – which is different for an unauthorised transaction.
Banks will always endeavour to help customers recover money stolen through an authorised push payment scam but customers typically only approach their bank after the payment has been processed, once they realise they have been duped. By this time the criminal has often withdrawn the stolen funds and the customer’s money has gone.
The full set of authorised and unauthorised fraud and scams data for 2017, including breakdowns by fraud type, is at https://www.ukfinance.org.uk/wp-content/uploads/2018/03/UKFinance_2017-annual-fraud-update-FINAL.pdf.
