Britons lost more than £1bn to fraudsters last year, new figures show, as purchase scams surge to a record high and social media firms face tough questions over the high levels of fraud originating on their platforms.
Criminals stole a total of £1.17bn through unauthorised and authorised fraud in 2023, according to data reported by members of trade body UK Finance, which include banks, card issuers and other payment firms.
Total losses were down four per cent from the previous year, while banks prevented a further £1.25bn of unauthorised fraud through their security systems.
Fraud is the most common crime in England and Wales, according to the Home Office, representing around 38 per cent of total offences. UK Finance said last year saw 2.97m confirmed cases of fraud, the equivalent of one every 11 seconds.
The number of authorised push payment (APP) fraud cases, where the victim is tricked into making the transfer themselves, rose 12 per cent to 232,429, although their combined value fell five per cent to £459.7m.
The increase in cases was driven by a 34 per cent jump in purchase scams, where victims are convinced to pay for goods that never materialise, costing Britons a record £85.9m.
APP fraud was also boosted by a spike in romance scams, where criminals pretend to be in a relationship with the victim. This type of fraud clocked a new high for losses and case numbers, with Britons losing £36.5m.
Card ID theft, where scammers use stolen personal information to take over or open a new account in the victim’s name, saw the most growth of any single fraud category. Case numbers surged 74 per cent to 142,442 and losses jumped 53 per cent to £79.1m – both new records.
As consumers increasingly use phones to manage their finances, the volume of unauthorised mobile banking fraud also jumped 62 per cent to a record level and was higher than web banking for the first time ever.
The data comes as the banking industry calls on social media and telecommunications giants to take more responsibility for the fraud that originates via their networks.
UK Finance’s report showed 76 per cent of APP fraud started online, although these cases only represented 30 per cent of total losses as they tend to involve lower-value scams. Meanwhile, 16 per cent of APP fraud originated through telecom networks.
Research by TSB Bank earlier this year found that more than a third of adverts on Facebook Marketplace could be scams.
Liz Ziegler, fraud prevention director at Lloyds Bank, said: “Scams are not an opportunist crime – they are perpetrated by organised criminal gangs, who are relentless in running their operations like a business.
“With such a large percentage of fraud starting online, tech companies and social media platforms must step up to share responsibility for protecting their customers.”
Chris Ainsley, head of fraud risk management at Santander UK, added: “We owe it to consumers to stamp out this harrowing crime, and the only way we’ll do that is if we can prevent it happening at source, and to do that, we desperately need cross-industry collaboration – including banks, tech companies, telecoms and government – to work together to create meaningful change.”
Leading tech firms including Amazon, Google, Microsoft, Tiktok and Meta, which owns Facebook and Instagram, last year signed up to the government’s voluntary Online Fraud Charter – pledging to bring in new measures to better protect consumers.
“The money stolen funds serious organised crime and victims often suffer emotional damage as fraud is a pernicious and manipulative crime,” said Ben Donaldson, managing director of economic crime at UK Finance.
“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.”
Banks and other payment firms are bracing for new rules from the Payments Systems Regulator (PSR) due to come into force in October that will require them to fully reimburse victims of APP fraud up to a limit of £415,000 per claim.
Industry figures have raised concerns that the costly measures could threaten smaller firms’ business models and encourage criminals to pretend to be victims for reimbursement money. City minister Bim Afolami said last week that the new measures had “significant problems”.
The PSR has argued its rules will significantly increase protection for consumers and incentivise payment firms to prevent APP fraud happening in the first place.
Positive signs from UK Finance’s report included the amount lost to criminals who impersonated a bank or the police and convinced victims to send money to a “safe account” falling 28 per cent as consumers heeded banks’ warnings that they would never ask someone to transfer money this way.