Fraudsters stole almost £600m from Brits in the first half of 2024, new figures reveal, in a sign of the heavy losses banks will cover under new mandatory reimbursement rules.
Criminals took home £571.1m through unauthorised and authorised fraud over the six months, according to data reported by members of trade body UK Finance, which include banks, card issuers and other payment firms.
That figure is a slight decrease from £580m over the same period last year. UK Finance said banks prevented £710.9m of unauthorised fraud in the first half of 2024.
Still, the total number of fraud cases rose 19 per cent to just over 1.6m – equivalent to nearly one case every 10 seconds.
Fraud is the most common crime in England and Wales, representing around 38 per cent of total offences, according to the Home Office.
Unauthorised fraud can include a criminal stealing someone’s bank details and taking money without their knowledge, whereas authorised fraud involves the victim making a transaction themselves in the false belief it is going towards a genuine payee.
“Fraud continues to pose a major threat in this country,” said Ben Donaldson, managing director of economic crime at UK Finance. “In addition to the financial impact, this crime can cause severe psychological harm to victims.”
UK Finance reported a 19 per cent increase in cases of unauthorised fraud to just over 1.5m. These losses also rose five per cent to £358m across payment cards, remote banking and cheques.
The rise in payment card losses is partly explained by a 26 per cent jump in “card not present” cases, where criminals socially engineer victims into sharing one-time passcodes to authenticate online transactions.
Meanwhile, Britons lost £213.7m to authorised push payment (APP) fraud, down 11 per cent year on year. These cases were also down 16 per cent to nearly 100,000, with declines across all categories.
Purchase scams, where victims are tricked into paying for goods that never materialise, made up around 70 per cent of the APP cases. The number of these scams fell 11 per cent, while losses ticked up three per cent to £42.3m.
Investment scams, often higher-value cases where victims are convinced to invest in things that are worthless or do not exist, incurred the most losses within categories of APP fraud. Fraudsters stole £56.4m across 3,647 cases.
The number of fraud cases where criminals impersonated a bank or the police to trick someone into transferring money to a “safe account” dropped 32 per cent, while these losses also fell 26 per cent to £32.3m.
Mandatory reimbursement
The losses to authorised fraud signal the heavy burden placed on banks under a new mandatory reimbursement scheme from the UK payments regulator that came into force on 7 October.
It has made payment firms liable for refunding victims of APP fraud up to a limit of £85,000 per claim and mostly within five working days, unless they can prove the customer acted with “gross negligence”.
The cap was lowered from £415,000 at the last minute after intense lobbying from industry groups including UK Finance, as well as pressure from ministers, over concerns it could put smaller firms out of business and encourage new types of scams.
“On its own it does nothing to prevent or reduce the psychological harms to victims, nor does it prevent organised crime groups from stealing money,” Donaldson said. “That is why the financial services industry is always focused on preventing fraud happening in the first place.”
Bosses remain concerned the rules still put the sector at risk of heavy losses and fail to hold technology firms liable for the surge of fraud stemming from social media platforms.
UK Finance’s latest report found 72 per cent of APP fraud started online and 16 per cent originated through telecommunications networks. The online proportion is down four per cent from last year, with telecoms unchanged.
“There have been some improvements made by other sectors, but their actions don’t yet fully match the scale of the problem,” Donaldson said. “More needs to be done to prevent fraudsters exploiting these platforms and networks.”
Online fraud, like purchase scams, tend to be lower in value and made up 32 per cent of total APP losses. Fraud via telecoms are often higher value, like impersonation fraud, so accounted for 35 per cent of losses.
“We must concentrate our efforts on protecting consumers, and to do that, we desperately need cross-industry collaboration – including banks, tech companies, telecoms and government – to create meaningful change,” said Stephen White, chief operating officer at Santander UK.
Liz Ziegler, fraud prevention director at Lloyds Bank, added: “Fraudsters are ever-present and quick to adapt, with social media platforms providing a perfect hunting ground for victims.”
Banks returned 59 per cent of APP losses, or £126.7m, to victims in the half-year. This proportion is down from 63.8 per cent a year earlier.