The banking trade body reported that unauthorised fraud fell by 8% to £374.3m in first half of 2020, with £207.8m lost to authorised push payment (APP) fraud.

UK Finance said the banking industry prevented £853m of losses as firms continue to invest in advanced security systems to detect and block fraudulent activity.

Finance providers were able to return £73.1m of APP fraud losses to victims, up 86% compared to last year.

Increase in online fraud

UK Finance is warning that criminals have been exploiting and adapting to Covid-19 with a growth in fraud and scams that target people online.

Many of these scams harvest customers’ personal and financial details, for example through phishing emails or smishing text messages impersonating trusted organisations.

There is often a delay between criminals obtaining people’s details and using them to commit fraud, meaning the full losses from Covid-19 related scams in the first half of this year are likely to not yet have been fully realised.

The figures also suggest criminals have been turning away from more traditional forms of fraud due to the impact of the pandemic.

Contactless card fraud, which takes place using lost and stolen cards, fell by 20% to £8.2m, the first year-on-year decrease since this data started being collected in 2013.

This is likely to be related to the reduced number of face-to-face transactions by consumers using contactless cards during the lockdown.

Cheque fraud losses also saw a significant fall of 78% to £6.4m, which is likely to have been driven by the reduced use of cheques during lockdown and the increased use of advanced security features on business cheques.

Authorised push payment fraud

About £207.8m was lost to APP fraud in the first half of 2020. This takes place when a customer is tricked into making a payment to another account that is controlled by a criminal.

UK Finance says APP fraud continues to be driven by the abuse of online platforms, including investment scams promoted on search engines and social media, fake goods listed on auction websites, and criminals posing as would-be partners on online dating platforms.

Katy Worobec, managing director of economic crime at UK Finance, says: “Criminals have ruthlessly adapted to this pandemic with scams exploiting the rise in people working from home and spending time online. These range from investment scams promoted on social media and search engines to the use of phishing emails and fake websites to harvest people’s data.

“The banking industry is working hard to protect customers from this threat, with almost £7 in £10 of fraud prevented in the first half of this year. But we need the public to remain vigilant against scams and remember that criminals are experts at exploiting events like Covid-19 to impersonate trusted organisations. Always take a moment to stop and think before parting with your money or information, and don’t let a criminal rush or panic you into making a decision that you’ll later come to regret.”

Jon Greer, head of retirement policy at Quilter, says: “The banking industry’s efforts to reduce the risk of online fraud have not gone unrewarded, and they were able to block almost £7 in every £10 of attempted fraud in the first half of this year.

“But it is inevitable with scammers that as one door closes, another door opens, and we need to be mindful that scammers will evolve and will find new ways of targeting consumers, particularly in these uncertain times.

“The government must now recognise the epidemic scale of fraud in the UK, and act to shut down every possible avenue that scammers exploit to reach their victims.”