Losses from authorised push payment (APP) fraud surpassed card fraud for the first time in the first half of 2021, according to new statistics from UK Finance.
In prior years, the highest fraud losses primarily stemmed from unauthorised fraud using payment cards. However, in 2021, criminals shifted their focus to APP fraud, which involves tricking customers into authorising payments to accounts controlled by fraudsters.
UK Finance noted a staggering 71% increase in APP fraud during the first half of 2021. For the first time, the total amount lost to APP fraud reached £355.3 million, exceeding the £261.7 million lost to card fraud.
This issue has attracted political attention, with advocacy groups urging the Payment Systems Regulator to compel banks to enhance protections for victims and ensure fair compensation.
UK Finance is also calling on the Government to implement a coordinated strategy under the recently passed Online Safety Bill to tackle what it describes as a “national security threat.”
Katy Worobec, managing director of economic crime at UK Finance, stated, “The banking and finance industry invests billions in advanced systems to prevent fraud, but criminals exploit vulnerabilities beyond banks’ control to deceive customers into making payments directly to them.”
She emphasized that “criminals continue to target customers with a range of scams, often through online platforms, and only through coordinated action can we make significant strides in addressing this issue.”