According to data released by trade group UK Finance, British bank clients were defrauded of 583 million pounds ($712 million) through sophisticated fraud in 2021, an increase of over 40% from the previous year.
As more individuals bank and buy online as a result of the COVID-19 pandemic, lenders have been fighting increasingly sophisticated fraud schemes against their consumers.
According to the UK Finance report, fraud losses at British banks grew 8 percent overall in the year to 1.3 billion pounds.
However, a breakdown showed that fraud losses from so-called authorized push payment schemes, in which a victim is conned into making a payment by a thief, increased by 39% to 583 million pounds. Banks paid out compensation to victims in nearly half (47%) of all cases.
The research revealed that a 7 percent decrease in “unauthorized” fraud losses—where money is taken without a customer’s knowledge or agreement, for example, by using stolen card information—helped keep the total for the industry under control.
“CEO frauds,” which saw a 165 percent increase, were the fastest-growing kind of “authorized” scam. In many cases, victims unwittingly sent money after receiving a message they mistook for one from the organization’s CEO.
Investment scams, impersonations of police officers or bank employees, and “romantic scams,” in which the criminal steals money after pretending to date the victim, were among the quickly expanding schemes.
UK Finance reiterated its appeal for more involvement in the fight against fraud from other industries, especially technology companies. The trade association praised a proposed UK regulation that would give the government more control over information sharing and the recovery of stolen property.
According to the report, banks and credit card issuers stopped 1.4 billion pounds’ worth of attempted unauthorized fraud over the year.
According to Katy Worobec, managing director for economic crime at UK Finance, fraud “has a catastrophic impact on victims and the money taken finances severe organized crime, as well as inflicting considerable costs on the wider economy.”
