Rise in fraud scams targeting victims online

Total fraud losses in 2020 hit a total of £1.26bn with 45% related to bank card fraud during the pandemic, although overall figures were down 4% year on year

Unauthorised financial fraud losses across payment cards, remote banking and cheques totalled £783.8m in 2020, a decrease of 5% compared to 2019, according to the latest Fraud Facts report by UK Finance.

In 2020, Authorised Push Payment (APP) fraud losses amounted to £479m, up 5% on the previous year. Banks and other finance providers were able to return £206.9m of the losses from APP fraud to victims, over three quarters more than the sum returned in 2019.

While the volume of losses fell slightly, the number of people caught by fraudsters rose over the period, rising by 4% to 2,835,622 cases.

There was a rise in the number of cases involving remote purchase fraud in 2020, which has driven the overall rise in fraud volumes. However, cases of fraud on lost and stolen cards have fallen significantly due to the restrictions in movement as a result of the pandemic.

Total remote banking fraud totalled £197.3m in 2020, 31% higher than 2019. The number of cases of remote banking fraud increased by 68% to 73,640. This reflects the greater number of people now regularly using internet, telephone and mobile banking, and attempts by fraudsters to take advantage of this.

Criminals turned to online and technology-enabled scams to exploit people’s fears about the Covid-19 pandemic, evading banks’ advanced security systems and using digital platforms to target victims directly and tricking them into giving away their money or information, avoiding banks’ security measures.

These attacks have included impersonation scams, where the criminals pose as a trusted organisation to get money or financial details – examples include fraudulent emails claiming to offer government support to those impacted by the pandemic and scam text messages requesting payments to book a Covid-19 vaccine.

UK Finance is calling for new legislation to make online platforms responsible for taking down fraudulent content and better protect consumers from these scams.

Katy Worobec, managing director of economic crime at UK Finance, said: ‘The banking industry has worked hard throughout the pandemic to protect customers from fraud and to go after the criminals behind it, with over £1.6bn of fraud stopped in 2020.

‘However, we are seeing a worrying rise in online and technology-enabled scams that evade banks’ advanced security systems and use digital platforms to target victims directly, tricking them into giving away their money or information.

‘We urge the government to use the upcoming Online Safety Bill to ensure online platforms take action to protect customers by taking down scam adverts on search engines, removing fake profiles on online dating websites and tackling fraudulent content on social media.

‘It cannot be right that online firms are effectively profiting from fraud, while society as a whole pays the price.’

Fraud - The Facts 2021 report

Sara White |Editor, Accountancy Daily, published by Croner-i

Sara White is editor of Accountancy Daily, published by Croner-i, and in...

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