Banking fraud hits £500m in H1 2018: UK Finance

A total of £145.4 million was lost due to authorised push payment scams, where the account holder is duped into authorising a payment to be made to another account.

Newly-collected data, published for the first time, reveals that purchase scams were the most prevalent authorised push payment scam in the first half of 2018, accounting for almost two thirds of reported cases with a total of £19.4 million lost.

In these scams the victim pays in advance for a product or service, such as a car, electronics or a holiday rental, which is never received or does not exist.

Unauthorised fraud cases, where the transaction is carried out by a third-party, totalled £358 million.

However during the same period, the finance industry prevented £705.7 million of unauthorised fraud, equivalent to £2 in every £3 of attempted unauthorised fraud.

Financial providers were also able to return a total of £30.9 million of authorised push payment losses over the period, despite having no legal requirement to cover consumers for these losses.

UK Finance says it is now working with consumer groups and the Payment Systems Regulator to establish an industry code which clearly establishes the circumstances in which APP scam victims will be reimbursed by their payments provider.

Katy Worobec, managing director of economic crime at UK Finance, said: “Fraud and scams pose a major threat to our country. The criminals behind it target their victims indiscriminately and the proceeds go on to fund terrorism, people smuggling and drug trafficking, whether or not the individual is refunded. Every part of society must help to stamp out this menace, especially by stopping the data breaches which increasingly are fuelling fraud.

“The finance industry is committed to fighting back, investing millions in security systems and cyber defences to protect customers. We have brought in new standards to ensure scam victims get the help they need from their payments provider; we are supporting law enforcement in disrupting the criminals and freezing stolen money; and we are assisting the government in improving intelligence sharing to extinguish the threat.”