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Scams where victims are tricked into sending money to fraudsters rose by one-fifth in the first half of the year, driven by purchase scams, where consumers pay for goods that never materialise.
According to data from trade body UK Finance, authorised push payment (APP) fraud rose by 22 per cent compared with the same period in 2022.
APP includes investment frauds found on search engines and social media, romance scams via online dating platforms and purchase rackets hosted on social media and auction websites.
Scammers will often attempt to hoodwink victims into making the payments themselves, but if even if the victim realises in time they may have already supplied enough details to enable the scammer to impersonate them and take control of their accounts or apply for credit cards in their name.
Scammers also use phone calls, texts and emails to fool victims into supplying their personal emails and passwords.
“These crimes often involve callous manipulation of the victim which can cause psychological and emotional harm,” said Ben Donaldson, managing director of economic crime at UK Finance. “Criminals are increasingly using social media, online platforms, texts, phone calls and emails to deceive victims into giving up their personal details and their money.”
Online APP fraud accounts for 77 per cent of cases, but these tend to be lower-value scams which only account for 32 per cent of total losses. Conversely, 17 per cent start through telecommunications networks and tend to be higher value, generating 45 per cent of overall losses. However, while the number of cases rose by more than one-fifth, total losses from APP fraud fell by 1 per cent to £239.3mn, and £152.8mn was returned to victims.
Criminals stole an overall £580mn via authorised and unauthorised fraud, a 6 per cent decline year-on-year. Instances of payment card and remote banking fraud fell by 9 and 29 per cent respectively.
“Predominantly, these are areas of fraud which banks are more comfortable detecting and preventing,” said Kathryn Westmore, senior research fellow for financial crime at the Royal United Services Institute. “We don’t see those fraudsters displaying the same level of innovation as APP fraudsters, who tend to reinvent their modus operandi and react to geopolitical events.”
Victims of unauthorised fraud cases are legally protected, with UK Finance estimating that 98 per cent are fully refunded.
“Strong customer authentication has also had an impact as you have to jump through more hurdles and there’s added friction before buying anything online,” added Westmore.
Financial institutions such as Lloyds and TSB seized on the data to call for social media companies and telecoms firms to strengthen measures to protect consumers from scams.
Last week, Amazon announced that it is joining Stop Scams UK, a cross-industry body of banks, technology and telecoms groups and will share insights on scam trends with the group.
