The latest fraud figures released by UK Finance highlight a significant increase in authorised push payment (APP) fraud in 2021, with losses rising by 39% compared to the previous year.
In total, over £1.3 billion was lost to fraud and scams in 2021, with unauthorised fraud accounting for £730.4 million and APP fraud at £583.2 million. Notably, nearly 40% of APP losses stemmed from impersonation scams.
Criminals impersonated various organizations, including the NHS, banks, and government departments, using phone calls, text messages, emails, fake websites, and social media to deceive individuals into divulging their personal and financial information. This information was then used to persuade victims into authorizing fraudulent payments.
The number of APP scam incidents reached 195,996 in 2021, resulting in losses of £214.8 million from impersonation scams and £171.7 million from investment scams. Purchase scams represented 51% of all cases, totaling £64.1 million in losses.
Despite the implementation of a voluntary reimbursement scheme for major UK banks, only 47% of victims saw their losses reimbursed, a statistic that has been criticized by consumer advocacy groups.
Katy Worobec, managing director of Economic Crime at UK Finance, stated, “Authorised fraud losses rose again this year as criminals targeted people through a variety of sophisticated scams, much of which occurred outside the banking sector and often involved 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 also noted that the upcoming Economic Crime and Corporate Transparency Bill presents an opportunity for the government to enhance information sharing and tracking of stolen funds, initiatives that have long been advocated for to assist in preventing fraud.
Kate Frankish, chief business development officer and anti-fraud lead at Pay.UK, echoed this sentiment: “These numbers provide further concerning evidence of the scale and seriousness of fraud in the UK. We must unite in our efforts, enhancing collaboration and knowledge sharing among banks, the government, regulators, telecom providers, social media companies, and law enforcement. Increasing public awareness of fraud risks and sharing data and technology to identify criminal activities can enable banks and payment providers to intervene proactively.”