Banks prevent £853m of attempted fraud in six months

Banks’ crime fighting efforts drove down losses to unauthorised fraud by eight per cent to £374.3 million in the first half of this year.

Analysis of fraud losses by UK Finance found that the banking and finance industry prevented £853 million of attempted unauthorised fraud over the same period, up four per cent on the previous year, as firms continue to invest in advanced security systems to detect and block fraudulent activity.

The industry body’s analysis suggests that almost £7 in every £10 of attempted fraud was blocked in the first half of this year. It has issued several warnings over the risk of criminals exploiting and adapting to COVID-19, with a growth in fraud and scams that target people online.

Many of these scams harvest customers’ personal and financial details, for example through phishing emails or smishing text messages impersonating trusted organisations.

There is often a delay between criminals obtaining people’s details and using them to commit fraud, meaning the full losses from Coronavirus-related scams in the first half of this year are likely to not yet have been fully realised.

The figures also suggest criminals have been turning away from more traditional forms of fraud due to the impact of the pandemic.

Contactless card fraud, which takes place using lost and stolen cards, fell by 20 per cent to £8.2 million, the first year-on-year decrease since this data started being collected in 2013.

This is likely to be related to the reduced number of face-to-face transactions by consumers using contactless cards during the lockdown, UK Finance said.

Cheque fraud losses were also down 78 per cent to £6.4 million, which is likely to have been driven by the reduced use of cheques during the lockdown period and the increased use of advanced security features on business cheques.

A total of £207.8 million was lost to authorised push payment (APP) fraud in the first half of 2020, which takes place when a customer is tricked into making a payment to another account that is controlled by a criminal.

This is in line with losses in the same period last year. Banks and other finance providers were able to return £73.1 million of the overall losses from APP fraud to victims, an 86 per cent increase on the sum returned in the same period in 2019.

APP fraud continues to be driven by the abuse of online platforms, including investment scams promoted on search engines and social media, fake goods listed on auction websites and criminals posing as would-be partners on online dating platforms.

Losses to investment scams rose by 27 per cent to £55.2 million in the first half of 2020, the largest increase of any scam type.

UK Finance called for fraud to be included in the scope of the government’s new online harms regulatory framework, to help ensure that online platforms address vulnerabilities that are being exploited by criminals to commit fraud.

Katy Worobec, managing director of economic crime at UK Finance, said: “Criminals have ruthlessly adapted to this pandemic with scams exploiting the rise in people working from home and spending time online.

“The banking industry is working hard to protect customers from this threat, with almost £7 in £10 of fraud prevented in the first half of this year, but we need the public to remain vigilant against scams and remember that criminals are experts at exploiting events like COVID to impersonate trusted organisations.”

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