The UK experienced a slight decrease in financial fraud losses in 2022, totaling £1.2 billion, primarily due to a 17% reduction in authorized push payment (APP) losses.
According to UK Finance figures, fraud losses dropped by eight percent compared to 2021, with the total number of fraud cases across the UK declining four percent to nearly three million. Unauthorised fraud losses, which include payment cards, remote banking, and cheques, amounted to £726.9 million in 2022, reflecting a decrease of less than one percent.
In contrast, APP fraud, which surged by 39% to £583.2 million in 2021, fell to £485.2 million last year. Notably, 57% of all reported cases involved purchase fraud, with case volumes surpassing 100,000 for the first time. Investment fraud accounted for a substantial portion of APP losses at 24%, despite a 34% decrease from the previous year. Overall, the reimbursements for APP fraud losses increased by five percent in 2022 compared to 2021.
UK Finance analyzed over 59,000 APP fraud cases to determine their sources. More than three-quarters of these cases originated online, mostly involving lower-value fraud such as purchase fraud, which accounted for 36% of total losses. Social media platforms generated the highest number of online fraud cases, roughly three-quarters of the total.
Conversely, 18% of fraud cases were linked to telecommunications, often representing higher-value cases like impersonation fraud, which accounted for 44% of total losses. The financial services sector has consistently argued that social media and telecom firms should bear responsibility for compensating victims of financial fraud, advocating for the inclusion of online scams in the government’s ‘Online Harms’ bill.
Recently, the business banking platform Tide urged the government to impose a tax on social media and telecom companies to help fund training for more police officers to address what it describes as Britain’s “fraud epidemic.”
David Postings, CEO of UK Finance, stated, “The banking and finance sector is at the forefront of efforts to tackle this criminal activity. The sector invests billions in detection and prevention and reimburses individuals who fall victim, even when the fraud originates outside the banking system. Our data underscores the significant amount of fraud that arises from online platforms and telecommunications. The government’s new fraud strategy appropriately emphasizes the need for robust measures to prevent fraud at its source, highlighting the necessity for other sectors to take greater action in addressing these issues.”