Fraud remains a major problem as over £1 billion is stolen by criminals in 2023, according to an update from UK Finance.
UK Finance recently released its 2024 annual fraud report, “detailing the amount its members reported as stolen through payment fraud and scams in 2023.”
Criminals stole £1.17 billion “through unauthorized and authorized fraud in 2023, a four per cent decrease compared to 2022.”
Banks prevented a further £1.25 billion of unauthorized fraud “through advanced security systems.”
76 per cent of APP fraud started online and 16 per cent started “through telecommunications networks.”
The financial services sector “is at the forefront of efforts to protect customers from fraud, including partnering with other sectors, government and law enforcement to prevent and disrupt this criminal activity and bring perpetrators to justice.”
Ben Donaldson, Managing Director of Economic Crime at UK Finance, said:
“Nearly £1.2 billion was stolen from customers in 2023 and the criminals who commit these crimes destroy lives and damage our society. The money stolen funds serious organized crime and victims often suffer emotional damage as fraud is a pernicious and manipulative crime.”
The financial services industry remains “at the forefront of efforts to protect customers, prevent fraud and support those who fall victim.”
As noted in the update:
“With reimbursement rules set to change we risk even more money getting into criminal hands, unless the technology and telecommunication sectors take proper action to stop the fraud that proliferates on their platforms and networks.”
Unauthorized fraud losses
Losses due to unauthorized transactions “across payment cards, remote banking and cheques were £708.7 million this year, down three per cent compared to 2022.”
The total number of recorded cases “was 2.7 million, down two per cent.”
One of the main contributors to the overall “fall in payment card fraud losses was a nine per cent fall in remote purchase losses, the fifth consecutive year of declines in this fraud space.”
The roll-out of Strong Customer Authentication (SCA) over “the past two years has helped to reduce this type of fraud by verifying customer’s identity.”
Card ID theft increased again this year, “with losses up 53 per cent to £79.1 million. Where criminals are unable to socially engineer their victims into making authorized push payments, they use the personal information gathered as well as stolen card details to either take over existing accounts or apply for new credit cards.”
There was a seven per cent increase in “the amount of unauthorised fraud prevented, to £1.25 billion.”
Victims of unauthorized fraud cases such “as these are legally protected against losses. And UK Finance research indicates that customers are fully refunded in more than 98 per cent of unauthorized fraud cases.”
Authorized push payment (APP) fraud losses “were £459.7million, down five per cent compared to last year. This comprised £376.4million of personal losses and £83.3million of business losses.”
The total number of APP cases “was up 12 per cent to 232,429. The main driver behind this is purchase scams, where people are tricked into paying for goods that never materialise. The total number of these cases rose 34 per cent to over 156,000, while the amount lost rose 28 per cent to £85.9 million making it the highest loss and case total ever recorded. Purchase scams account for 67 per cent of the total number of APP cases.”
UK Finance data on the sources of APP fraud shows:
76 per cent of APP fraud cases “originated from online sources.”
These cases tend to be lower-value scams, “such as purchase scams, and so account for 30 per cent of total losses.”
