Fraud levels pose a national security threat, say banks
Fraud cases have soared since the start of the pandemic with criminals using highly sophisticated tactics to scam victims.
Overall, £753.9m was stolen through fraud during the first half of 2021 – an increase of 30 per cent compared to the same period last year, according to figures from banking lobby group UK Finance.
Some £355.3m was lost to authorised push payment (APP) fraud – where victims are tricked into authorising a payment to an account controlled by a criminal. This is a 71 per cent increase year-on-year.
In cases of APP fraud, scammers use tactics such as phone calls, text messages and emails, as well as fake websites and social media posts, to trick people into handing over personal details and passwords. This information is then used to target victims and convince them to authorise payments.
According to UK Finance, criminals are targeting people as young as 14 via social media platforms to become money mules, where their bank account is used to launder stolen money.
Katy Worobec, managing director of economic crime at UK Finance, said: “Our latest figures show the sheer scale of fraud taking place in the UK and highlight clearly the need for coordinated action to address this threat. The banking and finance industry invests billions in advanced systems to try and stop fraud happening in the first place, but criminals are exploiting weaknesses outside of banks’ control to trick customers into making payments directly to them.
“This is why we are calling for coordinated action and increased efforts from government and other sectors to tackle what is now a national security threat.”
Jenny Ross, money editor at Which?, said: “A staggering amount of money has been lost to fraud during the pandemic, and it’s particularly concerning that losses to bank transfer scams have overtaken card fraud for the first time.
“The regulator must introduce mandatory and more robust reimbursement requirements for all payment providers, to ensure that customers are treated fairly and consistently when they fall victim to a bank transfer scam. It must work quickly with the government to get the powers it needs to deliver this.”