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UK Finance Report Urges for Cross-Sector Action to Combat Fraud

UK Finance has published its latest fraud report covering the first half of 2022; reiterating calls for cross-sector action to target cyber criminals.

According to the report, over £609.8million was stolen by criminals through authorised and unauthorised fraud in H1 2022, a decrease of 13 per cent on H1 2021.

Of this total, unauthorised fraud losses were £360.8million and authorised push payment (APP) fraud losses were £249.1million.

The decrease has been attributed to H1 ’21 being an exceptionally high period for fraud and is therefore not indicative of the beginning of a downward trend.

While the conclusion of the pandemic has seen a fall in overall fraud losses, the report shows how some fraud types have increased as criminals continue to adapt their methods.

On the offensive, the banking and finance industry worked to stall an additional £583.9million in unauthorised fraud from being seized by the criminals.

Victims of unauthorised payment card fraud are legally protected against losses. Industry analysis shows customers are refunded in excess of 98 per cent of all confirmed cases.

Given that much of the fraud is initiated from criminal activity taking place through online and technology platforms, UK Finance and its members have used this report to call for greater cross-sector action to tackle the problem at the source.

Katy Worobec, managing director of economic crime at UK Finance
Katy Worobec, managing director of economic crime, UK Finance

“As we have warned previously, the level of fraud in the UK is such that it must be considered a national security threat,” Katy Worobec, managing director of economic crime at UK Finance, says in the report.

“The industry is continuously focused on tackling the threat as we know criminals continue to find new ways to exploit potential victims,” comments Worobec.

“However, criminal gangs simply bypass the advanced security measures banks have in place and instead directly target the customer, usually outside the confines of the banking system.”

She continues: “This is why it is key that other sectors work with us to fight fraud as it remains a persistent threat to businesses, consumers and the growth of the economy not to mention the reputation of the UK as a place to do business.”

Leading the industry’s response to UK Finance’s report, Colum Lyons, CEO and founder of ID-Pal, says that when it comes to fraud, financial service providers need to adopt the mindset of ‘not if, but when’.

“The reduction in instances of fraud in the same period last year is positive to see,” comments Lyons. “Solutions that simplify fraud prevention so businesses of any size can benefit from them, have led to the increasing adoption of anti-fraud technology across more industries.

“Fraud is an ever-present threat to both organisations and individuals and action needs to be taken to protect both from this risk.

“Identifying fraudsters before they can cause harm is central to this and having robust digital ID&V processes in place that can prevent fraud at source is key.”

Adding to the narrative, Kate Frankish, chief business development officer and anti-fraud lead at Pay.UK, explains that while fraud has slowed down compared to previous years, its threat continues to have a devasting impact on consumers and businesses.

“Fraudsters adapt to new circumstances with alarming agility and will continue to take advantage of those feeling financial pressure from the cost-of-living crisis,” comments Frankish.

“It’s critical that all institutions involved come together to outpace scammers and help protect people when they’re most vulnerable.

“A coordinated, cross-industry effort between banks, government, law enforcement, regulators and technology, telecoms and social media companies, is key to effectively tackle fraud in real-time.”

Author

  • Tyler is a fintech journalist with specific interests in online banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

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