Soaring £735m fraud is ‘national security threat’

Courier fraud scam exposed on Crimewatch UK

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Industry lobby group UK Finance said £753.9million was stolen by fraudsters in the first six months of 2021 – 30 percent up on 2020. Luckily, banks were able to prevent a further £736million from being taken by criminals. But they warn they cannot continue to handle the threat alone and are calling for an official response from the Government, aided by technology, social media and telecoms groups.

UK Finance managing director Katy Worobec said: “The level of fraud in the UK is such that it is now a national security threat. The banking sector cannot solve this on its own. There must be a coordinated approach.”

TSB chief Debbie Crosbie added: “Fraud is one of the fastest growing crimes and more needs to be done to protect customers.

“Beyond banks, social media and tech companies need to do more to reduce the increasing amount of scams emerging online.”

Ms Worobec said that while the Government’s upcoming Online Safety Bill will give people greater protection against crimes such as investment scams, it does not tackle the problem of adverts being posted online by fraudsters looking to entrap victims.

UK Finance has seen a “significant” increase in the number of online adverts aimed at recruiting “money mules” – people paid by criminals for allowing them to use their bank accounts to launder their fraudulent gains.

Ms Worobec said: “These adverts are typically aimed at younger people who may not realise the severity of what they are doing or even know that it is a crime.

“It is difficult to determine how much of the fraud losses are passing through money mule networks. But what is clear is that they enable criminals to get away with fraud, as it is far more difficult for banks to identify such transactions because money is being passed through existing and legitimate accounts.”

She added: “While we wait for legislation, the problem of fraud is here, now and growing.”

UK Finance has also seen a rise in impersonation scams, where criminals pose as banks, government bodies, retailers and even health officials to con people.

It said victims were losing “life changing” amounts of money to purchase scams, where they pay for goods which never appear.

Banks detected approximately 1.5 million cases of fraudulent card, cheque and remote banking transactions in the first half of 2021, an increase of 8 percent. The amount of money lost this way increased by 7 percent to £398.6million.

Fraudsters are also using online platforms more. UK Finance said 71 percent of authorised push payment frauds – where people are tricked into authorising payments into criminals’ accounts – stem from the internet. A staggering £353.3million was stolen this way during the first half of 2021.

There was also a huge surge in investment scams, with cases up 84 percent to 6,864 and losses nearly doubling to £107.7million.

While fraud has flourished online in the pandemic, UK Finance said cash machine fraud levels fell 20 percent in the first half of 2021.

It believes the drop is partly due to fewer people using cash machines in lockdown.

And cheque fraud has fallen by 46 percent during the pandemic.


Comment by Myron Jobson, personal finance campaigner at Interactive Investor

The epidemic of financial fraud in the UK has been compounded by the coronavirus crisis, which fraudsters have used as an opportunity to prey on consumers’ financial worries.

It appears to be a case of one step forward, two steps back when it comes to financial fraud. While the banking and financial industry has enjoyed success in preventing attempted unauthorised fraud to the tune of £736million, losses from this type of fraud is still on the up – such is the scale of the problem.

The internet is a rich trolling ground for unscrupulous individuals to convince unsuspecting victims to part with their hard-earned money. As such, the gatekeepers of the internet – social media companies included – have a starring role in tackling the scourge of financial scams.

It is all too easy for fraudsters to promote their scams to the masses, so it paramount that Online Safety Bill put a legal onus on these companies to do more in tackling the issue.

However, the onus is on individuals to avoid falling prey to financial fraud. Scammers don’t discriminate – they cast a wide net, hoping the sheer quantity of potential victims will yield sufficient monetary haul.

Fraudsters are only too willing to exploit any ignorance or naivety. To make matters worse, scammers have become more sophisticated in trying to pass themselves off as legitimate.

Scams can be difficult to recognise, but there are things you can look out for such as a dodgy looking website address, poor grammar and spelling, a lack of reliable contact information among other.

Never trust anyone wanting personal information and remember: If it seems too good to be true then it is indeed too good to be true.

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