Home Business NewsBusiness Amount stolen through fraud spikes 30% in the first half of the year

Amount stolen through fraud spikes 30% in the first half of the year

by LLB Editor
22nd Sep 21 11:03 am

The pandemic has seen an evolution in fraud as criminals continuously look for new ways to target potential victims. Latest figures released by UK Finance show the scale of the problem is only growing, despite the efforts of the banking and finance industry.

In the first half of this year, criminals stole a total of £753.9 million through fraud, an increase of over a quarter (30 per cent) compared to H1 2020. The advanced security systems used by banks prevented a further £736 million from being taken.

Over the previous editions, our reports showed the largest fraud losses were due to unauthorised fraud committed using payment cards. However, in the first half of 2021, criminals focused their activity on authorised push payment (APP) fraud, where the customer is tricked into authorising a payment to an account controlled by a criminal.

Using tactics such as scam phone calls, text messages and emails, as well as fake websites and social media posts, criminals seek to trick people into handing over personal details and passwords. This information is then used to target victims and convince them to authorise payments.

APP fraud losses increased 71 per cent during the first half of 2021 – surpassing the amount of money stolen through card fraud for the first time.

There were significant increases in impersonation scams, as criminals posed as banks, government bodies and even health officials to trick people out of their money.

There has also been an increase in purchase scams, where people make a payment for goods they believe to be genuine but which never materialise. Increasingly we are seeing life-changing sums being lost to such scams.

Investment scams are another area of significant concern, where people are persuaded to transfer or ‘invest’ often substantial sums of money with tales of fictitious dividend payments or high returns, only to lose their investments.
What all these scams have in common is that criminals are using online platforms, including fraudulent advertising through search engines and social media, and fake websites. UK Finance analysis conducted earlier this year found that 70 per cent of authorised push payment scams originated on an online platform.
Worryingly, there has also been a significant increase in online adverts encouraging people to become money mules – where people allow their bank account to be used to ‘cash out’ fraudulent funds. These adverts are typically aimed at younger people who may not realise the severity of what they are doing or even know that it is a crime.
It is difficult to determine how much of the fraud losses are passing through money mule networks, but what is clear is that these money mule accounts enable criminals to get away with fraud, as it is far more difficult for banks to identify such transactions because the money is being passed through existing and legitimate accounts.
The level of fraud in the UK is such that it is now a national security threat. The banking sector cannot solve this

You may also like

Leave a Comment


Sign up to our daily news alerts