Fraudsters stole £1.2bn in 2022 as UK labelled ‘fraud capital of the world’
The UK has much further to go in its campaign against fraud as the latest figures show that over £1.2bn was stolen in 2022.
According to new figures from UK Finance, £2,300 was lost every minute to authorised push payment (APP) fraud and unauthorised fraud. Commenting on the report, chief executive of UK Finance David Postings said the UK is “the fraud capital of the world.”
Unauthorised fraud losses across payment cards, remote banking and cheques was £726.9m in 2022, a decrease of less than one per cent compared to 2021.
APP fraud reached £485.2m, down 17 per cent compared to 2021. APP fraud is when a customer is tricked into authorising a payment to an account controlled by a criminal.
Although the figures showed a slight decrease in the levels of fraud, director of economic insight and research Lee Hopley pointed out that this represented some “unwinding” of trends seen in the pandemic when financial crime spiked.
For the first time, in the second half of the year UK Finance also collected data on where the fraud originated. The data showed 78 per cent of APP fraud cases originated online.
A further 18 per cent of fraud cases originated via telecommunications. Generally fraud from telecom companies was of a higher value and accounted for 44 per cent of losses.
“Our data also makes clear just how much fraud emanates from online platforms and through telecommunications,” Postings said.
The figures come shortly after the government released its strategy to tackle fraud which controversially watered down proposals to make tech companies reimburse fraud victims.
Postings said that “tech companies should be reimbursing” victims of fraud. “There’s no reason they couldn’t pay into a reimbursement fund,” he said.
TSB’s director of fraud prevention Paul Davis also called for big tech firms to take more action. “Action from social media firms and phone companies to reduce fraud is also crucial – as these sectors must take more responsibility for their users’ safety,” he said.
Large number of scams occurring through Meta-owned companies
Recent data released by TSB showed that in the three biggest categories of fraud – purchase scams, impersonation scams and investment scams – 80 per cent took place through Meta-owned companies.
Levels of APP fraud reimbursement increased to 59 per cent in the year, up five per cent on the year before.
Proposals under consideration by the Payment System Regulator (PSR) would force banks to reimburse all victims of APP fraud where the loss is over £100. Postings warned that this could lead to consumers taking less care with their payments
“If there’s no reason for consumers to take any concern when making a payment, then why would they,” Postings asked.
Looking forward, UK Finance signalled concern over how AI may create increasingly sophisticated varieties of fraud.
The report highlighted that fraudsters are using generative AI, such as ChatGPT, and voice cloning devices to make scams even more convincing.