Banks block £820m attempted fraud in six months

The banking industry stopped £820 million of unauthorised fraud in the first half of 2019 -equivalent to £4.5 million a day, according to new figures from UK Finance.

New data from the industry association found that financial services institutions succeeded in preventing 14 per cent more cases of unauthorised fraud in the first six months of 2019 than last year.

This is equivalent to £2 in every £3 of attempted unauthorised fraud being stopped, amounting to £4.5 million of fraud being prevented a day on average.

Over the same period, £408 million was stolen by criminals through unauthorised card, remote banking and cheque fraud while £208 million was lost to authorised push payment (APP) fraud, where customers are tricked into authorising a payment to an account controlled by a criminal.

This is an increase of two per cent compared to the first half of 2018, but a fall of £36 million compared to the second half of 2018.

The analysis underlined the fact that the compromise of personal and financial data, particularly with the growth of online shopping, remains a significant driver behind fraud losses.

It found that customer details are being stolen through data breaches at third parties outside the financial sector, while sophisticated “digital skimming” attacks are being used to steal card data when consumers are shopping online.

Criminals also continue to use social engineering techniques to trick customers into divulging their personal information or transferring money.

Losses due to unauthorised transactions on payment cards increased two per cent to £313 million, the industry prevented £488 million in attempted unauthorised card fraud, three per cent less than in the first half of 2018.

Three-quarters of card fraud losses (£237 million) were due to remote purchase fraud, where stolen card details are used to buy something online, over the phone or via mail order.
When a customer authorises a payment to be made to another account, even if they are tricked into doing so, current legislation means that they have no legal protection to cover them for the losses – unlike an unauthorised transaction.

However, an industry voluntary code that came into effect on 28 May 2019 has introduced new consumer protections against authorised push payment fraud.

Katy Worobec, Managing Director of Economic Crime at UK Finance, said: “Not only does fraud have a devastating impact on victims, the money stolen goes on to line the pockets of organised criminal gangs involved in drugs, arms and human trafficking.

“The finance industry is constantly investing in advanced security systems to protect customers from this threat, while helping law enforcement to apprehend and disrupt the criminals responsible.”

She added: “However, criminals are continuing to exploit vulnerabilities outside the financial sector to obtain customers’ data that is then used to commit fraud. We all have a responsibility to work together, including online retailers and social media companies, to beat the fraudsters and keep customers’ data secure.”

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