Vertical Markets

Fraud report

by Mark Rowe

The UK’s finance industry prevented £1.66 billion of unauthorised fraud during 2018. That’s the equivalent of stopping £2 in every £3 of attempted unauthorised fraud, according to the latest report, Fraud the Facts 2019, from the trade body UK Finance. Last year, a total of £1.20 billion was stolen by criminals doing authorised and unauthorised fraud.

UK Finance suggests that theft of personal and financial information by social engineering, caused by data breaches outside the financial sector, was a major contributor to the fraud losses. The trade association reports a total of 2,651,556 cases of unauthorised financial fraud.

Katy Worobec, Managing Director of Economic Crime at UK Finance, said: “Fraud is a crime which poses a major threat to us all – it can have a devastating impact on victims and the money stolen funds even more damaging crimes such as terrorism, drug trafficking and people smuggling. Every business, from online retailers to social media companies, as well as the public sector, has a duty to work together to beat fraud and prevent stolen data getting into the hands of criminals.

“Last month, the finance industry and consumer groups agreed a voluntary code which will increase protection for customers from authorised push payment scams. It delivers a significant commitment from signatories to reimburse victims when the customer has met the standards expected of them under the Code. At the same time the industry continues to fight fraud on every front to protect customers and prevent this kind of crime – investing in advanced security systems and new ways to track stolen funds, assisting law enforcement in tackling the criminals and supporting the government in improving the ways in which intelligence is shared.”

In February, the Authorised Push Payment Scams Voluntary Code was agreed after work between the industry, consumer groups and the Payment Systems Regulator; it comes into effect on May 28. Firms who sign up to the code will reimburse victims of authorised push payment scams in any scenario where their bank or payment service provider is at fault and the customer has met the standards expected of them under the code. Whereas now, if customers authorise a payment, they have no legal protection to cover them for losses.

Total losses due to unauthorised fraud across payment cards, remote banking and cheques in 2018 were £845 million, an increase of 16 per cent compared to 2017. Losses due to unauthorised transactions on payment cards increased 19 per cent to £671m. The industry prevented £1.12 billion in attempted unauthorised card fraud, 14 per cent more than in 2017. Three-quarters of the card fraud losses (£506m) was due to remote purchase fraud, where stolen card details are used to buy something online, over the phone or via mail order.

Losses due to unauthorised remote banking fraud totalled £153m, 2 per cent lower than 2017. This category covers unauthorised fraud through internet banking, telephone banking and mobile banking. Banks prevented £318m of attempted unauthorised remote banking fraud. Cheque fraud losses rose by 109 per cent to £21m. The volume of fraudulent cheques increased by only 16 per cent, indicating that a small number of high-value fraudulent transactions made during the year led to the rise in losses; rather than a change to the longer-term downward trend in such fraud.


According to the Take Five to Stop Fraud campaign:

A genuine bank, organisation or the police will never contact you out of the blue to ask for your PIN, full password or to move money to another account. Only give out your personal or financial details to use a service that you have given your consent to, that you trust and that you are expecting to be contacted by. Never automatically click on a link in an unexpected email or text. Always question uninvited approaches in case it’s a scam. Instead, contact the company directly using a known email or phone number.

For the 2019 report in full visit the UK Finance website.

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