According to figures from the UK banking industry, fraud cases have increased by 16%, with con artists stealing more than £3m per day. The criminals are targeting victims by deceiving them into giving away their one-time passcodes, trade body UK Finance reported. Even though the number of reported cases has risen, the total losses have only slightly fallen, amounting to £572m during the first half of the year. UK banks have stated that fraud is a significant threat to the country and have called for assistance in tackling the crime.
The figures are out following a stream of cases involving e-money company Revolut, according to a report from BBC Panorama. Among those is one victim who lost £165,000 from their business account within an hour. Revolut argued having “robust controls” in place.
Compared with the same period last year, cases have risen during the first six months of 2021 due to fraudsters changing their tactics. Unauthorised payments sharply increased, with losses up by 5%, largely due to fraudsters getting around protection systems. In order to confirm a transaction, customers are often sent a one-time passcode during an online payment. Scammers have found ways to trick people into revealing these codes, thus stealing money. Despite that, the latest data demonstrates a comparatively large decrease in romance and investment frauds, possibly resulting from stricter regulations regarding authorised push payment (APP) fraud prevention.
When criminals trick victims into sending money by posing as reputable businesses like banks or tradespeople, this is known as APP fraud. New mandatory rules came into effect on 7 October 2024, which requires UK banks to refund APP fraud victims up to £85,000 within five days. Previously, most banks agreed to a voluntary reimbursement code. During H1 2021, 97,344 instances of APP fraud with total losses of £214m were reported.
UK Finance’s Ben Donaldson, Managing Director of Economic Crime, commented, “fraud continues to pose a major threat in this country. In addition to the financial impact, this crime can cause severe psychological harm to victims. This isn’t a fight we will win alone.” In separate news, Lloyds Banking Group’s Chief Executive, Charlie Nunn, accused tech firm Meta that owns social media platforms Facebook and Instagram of “enabling” people to be contacted by fraudsters running online scams. Meta responded that its “pilot Fraud Intelligence Reciprocal Exchange programme (FIRE)” was intended to let banks share information and collaborate in protecting users of their respective services.
The regulation of UK financial services is overseen by the Financial Conduct Authority, allowing customers to complain against a regulated firm to the Financial Ombudsman Service, with the power to settle disputes and order reimbursement. The Mandatory Reimbursement Requirement put in place on 7 October 2024 provides customers with protection from authorised push payment (APP) frauds, with banks paying for the majority of UK money transfers up to £85,000, with the exception of international transactions or those with cryptocurrencies, with refunds split equally between sending and receiving firms
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