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‘Collaborative Action Needed to Combat Scams’ – £1.2billion Stolen Says UK Finance

UK Finance’s latest Annual Fraud Report exposes £1.2billion stolen via financial fraud in 2022. While efforts to prevent scams have led to a decline, industry leaders stress the need for continued vigilance and collaborative action.

The recently released report has shed light on the alarming extent of financial fraud in the UK during 2022. Criminals stole over £1.2 billion through both authorised and unauthorised means, averaging £2,300 pilfered every minute.

The report also revealed key insights into the origins and types of fraud, as well as measures taken by the banking and finance industry to prevent further losses.

  • Seventy-eight per cent of APP fraud cases start online and 18 per cent start via telecommunications
  • The banking and finance industry prevented a further £1.2billion of unauthorised fraud from getting into the hands of criminals
  • Fraudsters successfully stole over £1.2 billion in 2022, marking an eight percent reduction from the previous year
  • The number of fraud cases across the UK was down four per cent to almost three million cases
  • Unauthorised fraud losses across payment cards, remote banking and cheques reached £726.9million in 2022, a decrease of less than one per cent compared to 2021
  • Authorised push payment (APP) fraud losses reached £485.2 million, down 17 per cent compared to 2021

David Postings, chief executive at UK Finance, said: “Fraud has a devastating impact on victims and over £1.2billion was stolen by criminals last year. The banking and finance sector is at the forefront of efforts to tackle this criminal activity. The sector spends billions on detection and prevention and also refunds people who have fallen victim, even if the fraud originated outside the banking system.

“Our data also makes clear just how much fraud emanates from online platforms and through telecommunications. The government’s new fraud strategy rightly says we need to focus on stopping it at source and that these other sectors need to do far more to tackle the problem they are facilitating.”

‘Hold firms accountable’

In response to the report, industry leaders have expressed a mix of cautious optimism and concern. Emma Lovell, CEO of the Lending Standards Board, welcomed the decline in overall scam rates but emphasised the importance of preventative measures to protect customers from the emotional and financial distress caused by scams.

She said: “The CRM Code exists to ensure signatory firms protect their customers with procedures to detect APP scams, prevent them, and respond to them when they do slip through the net. Despite scammers becoming more sophisticated by the day, the statistics have shown that firms are succeeding in reducing the number of successful scams, a key focus for those signed up to the CRM Code. We must continue to hold firms accountable by having independent standards in place to further drive down the volume of successful APP scams.”

‘Integration of security’

Katharine Wooller, business unit director at digital asset protection firm Coincover, highlighted the potential for technology firms to play a pivotal role in reducing fraud losses. Wooller called for a comprehensive integration of security measures across all areas of financial operations, especially in the realm of digital assets.

“Regulators play a pivotal role in shaping the industry; however, it is essential for the industry itself to realise that security needs to be integrated into every facet of its operations. The realm of digital assets should be one of the easiest sectors to find and neutralise bad actors, as data is decentralised and therefore can be viewed by all.

“Humans can only get so far when fighting other humans — but constant vigilance is key. A collective effort will strengthen the fight against fraud, fostering an environment of trust in the digital asset landscape.”

‘No-one is immune’

Myron Jobson, senior personal finance analyst at online investment platform interactive investor, pointed out the evolving nature of financial scams and the challenge they pose. While the report showed a decrease in the value of APP fraud, there was a five per cent increase in the number of victims falling prey to this type of fraud. Jobson emphasised the need for individuals to remain vigilant and highlighted the importance of the forthcoming Online Safety Bill in combating financial fraud.

“Fraudsters are only too willing to exploit any ignorance or naivety. We often overestimate our ability to spot a financial scam when, in reality, even those who consider themselves financially savvy aren’t immune to increasingly sophisticated scams.”

‘Step up social media firms’

Paul Davis, director of fraud prevention at bank TSB, highlighted the urgency of implementing mandated refunds, especially for customers of other banks, given that two-fifths of stolen funds remain unreimbursed. Davis also called for increased responsibility from social media platforms and phone companies to enhance user safety and reduce fraud.

“With two fifths of the funds stolen by fraudsters not returned to customers of other banks, it’s clear that plans for mandated refunds can’t come soon enough.

“Action from social media firms and phone companies to reduce fraud is also crucial – as these sectors must take more responsibility for their users’ safety.”

‘Complexity of fraud’

Kate Frankish, chief business development officer and anti-fraud lead at UK payment systems operator Pay.UK, drew attention to the complexity of fighting fraud, involving regulatory, policy, business, and technological elements.

She stressed the need for collaborative efforts between regulators, law enforcement agencies, online platforms, telecommunication providers, and financial institutions to effectively combat fraud.

“The UK Finance fraud figures show that while we have made some important progress, there’s a lot more work to be done to protect victims of fraud. To tackle this issue, regulators and law enforcement must keep up with new technology and work more closely with online social and technology platforms, telecommunication providers and financial institutions.

“We are seeing the beginnings of better collaboration in government plans to work closely with Ofcom, and in increased business responsibility for fraud prevention outlined in Online Safety Bill drafts. But more needs to be done. The role of policy, regulators and policing remains critically important. But to get the best results we need businesses and technology platforms to work more closely with government institutions and be proactive in finding ways to spot and eliminate crime before it happens.”

Report summary

The report highlights the significant progress made in tackling fraud, with an eight per cent reduction in fraud cases compared to the previous year. However, it also underscores the ongoing threat posed by scammers, necessitating constant vigilance and continued action.

The need for collaboration between industry players, regulators, and government institutions is crucial in staying ahead of evolving fraud tactics and protecting customers from financial and emotional harm.

As technology evolves and criminals become more sophisticated, it is imperative that all stakeholders work together to implement robust security measures, detect emerging scams, and foster an environment of trust in the financial landscape. Only through concerted efforts and ongoing cooperation can we effectively combat financial fraud and provide the best protections for individuals and businesses alike.

UK Finance urges customers to follow the advice of the Take Five to Stop Fraud campaign, and remember that criminals are experts at impersonating people, organisations and the police

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