UK Finance calls for action as criminal gangs steal over £1.3bn in 2021
UK Finance has called for cross-sector action as its latest fraud report revealed over £1.3 billion was stolen through fraud and scams.
This report shows the scale of fraud taking place as well as how criminals took advantage of people’s doubts and fears during the pandemic to commit fraud, often by exploiting weaknesses outside of the banking system.
According to the figures, unauthorised fraud losses across payment cards, remote banking and cheques claimed £730.4 million last year and authorised push payment (APP) fraud cost £583.2m across the UK, with nearly 40% of APP losses due to impersonation scams.
APP fraudsters trick customers into authorising a payment to an account controlled by a criminal. In 2021, criminals impersonated a range of organisations such as the NHS, banks and government departments via phone calls, text messages, emails, fake websites and social media posts to trick people into handing over their personal and financial information. They subsequently used this information to convince people into authorising a payment.
There were 195,996 incidents of APP scams in 2021, £214.8m was lost to impersonation scams, whereby criminals impersonate a range of organisations to trick people into giving away their personal and financial information. This was the largest category of APP losses.
A further £171.7m was lost to investment scams, the second largest category of APP losses While 99,733 cases of purchase scams were recorded, which means this was the most common type of scam – accounting for 51% of all cases – although total losses were £64.1m.
A total of £271.2m of losses were returned to victims of APP scams, accounting for 47% of losses.
The banking and finance industry prevented a further £1.4bn of unauthorised fraud from getting into the hands of criminals.
Given that much of the fraud is initiated from criminal activity taking place through online and technology platforms, UK Finance and its members have long been calling for greater cross-sector action to tackle the problem and will continue working with the government on upcoming legislation in this area.
Katy Worobec, managing director of Economic Crime at UK Finance, said: “Fraud has a devastating impact on victims and the money stolen funds serious organised crime, as well as imposing significant costs on the wider economy.
“Unauthorised fraud losses fell last year, but this type of criminal activity remains a major problem. Through the introduction of new measures such as strong customer authentication, coupled with continued investment in technology, the banking and finance industry prevents significant amounts of fraud from taking place.
“Authorised fraud losses rose again this year as criminals targeted people through a variety of sophisticated scams, with much of the criminal activity taking place outside the banking sector, often involving online and technology platforms. This is why we continue to call for other sectors to play a greater role in helping protect customers from the scourge of fraud.”
She concluded: “The upcoming Economic Crime and Corporate Transparency Bill is an important development and provides the opportunity for the government to give new powers on information sharing and tracking stolen money. These are things we have long called for and will support efforts to work together and stop the fraud happening in the first place.”