Unauthorised frauds accounted for £731.8m, while authorised frauds – where the account holder has been deceived into providing authorisation for payments – amounted to £236m. The UK Finance research found there were 1,910,490 reported cases of unauthorised financial fraud last year, a 3% rise on 2016 figures.

Unauthorised fraud losses on payment cards fell 8% year-on-year to £566m, with the industry helping to prevent £984.9m in attempted card fraud. Cheque fraud fell 28% to £9.8m, the lowest annual total on record, with £213.3m of fraud prevented. However, losses due to remote banking fraud rose 14% to £156.1m, despite banks preventing 27% more, or £261.4m of such attempts.

Authorised

Meanwhile, data on authorised push payment scams (APP or authorised bank transfer scams) were collected for the first time, totalling £236m in 2017. Of the 43,875 reported APP cases, 88% were retail consumers who lost an average £2,784 per case, while scams on businesses took out an average £24,355 per case.

Financial providers were able to return 26%, or £60.8m to the victims of APP scams. Authorised fraud can be particularly damaging because at present legislation does not offer protection for those who were tricked into authorising payments themselves.

Tony Blake, senior fraud prevention officer at the Dedicated Card and Payment Crime Unit, said: “With criminals using social engineering to target people and businesses directly, it’s vital that everyone follows the advice of the Take Five campaign. Always stop and think if you are ever asked for your personal or financial details. Remember, no bank or genuine organisation will ever contact you out of the blue and ask you to transfer money to another account.”

Tactics

Intelligence indicated that social engineering tactics were employed to commit fraud, where fraudsters manipulate people into giving personal details or transferring money directly to them, for instance through impersonation scams. Data breaches were also a major contributor to fraud losses, with criminals using stolen data to commit fraud directly to make unauthorised purchases, impersonate individuals, or facilitate deception scams.

Indeed, Financial Conduct Authority (FCA) figures showed that reported incidents of hacking attempts against financial services firms rose 80% from 38 in 2016 to 69 in 2017. The FCA data also showed a fourfold increase of hacking attempts resulting in loss of data over that period.

Katy Worobec, managing director of economic crime at UK Finance, said: “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.”