The latest report from banking trade body, UK Finance, has shown a rise in the number of people duped into transferring money to criminals.
The report, which looks at both authorised and unauthorised fraud figures across the UK banking and finance sector in 2021, found more than £1.3bn was stolen through fraud and scams last year: unauthorised fraud was £730.4m and authorised push payment (APP) fraud was £583.2m, with nearly 40% of APP losses due to impersonation scams.
The figures actually show a decrease in instances of unauthorised fraud, which the trade body puts down to measures put in place by financial institutions to mitigate this risk. One of these measures is real-time transaction analysis, which UK Finance claims prevented £1.4bn of unauthorised fraud in 2021.
Katy Worobec, managing director of Economic Crime at UK Finance, said: “Authorised fraud losses rose again this year as criminals targeted people through a variety of sophisticated scams, with much of the criminal activity taking place outside the banking sector, often involving online and technology platforms. This is why we continue to call for other sectors to play a greater role in helping protect customers from the scourge of fraud.”
UK Finance also highlighted the work of the Economic Crime Strategic Board (ESCB) which is currently focussing on reforming the use of Suspicious Activity Reports (SARs). How SARs are processed and used to detect and prevent potential criminal activity has come under criticism in recent years, in particular after the FinCEN files investigation carried out by the ICIJ (International Consortium of Investigative Journalists) exposed inconsistencies in how SARs were completed and apparent inaction from many US banks to prevent what appeared to be blatant illegal activity flagged by thousands of SARs.
According to the report, the biggest increase in fraud losses year-on-year came from CEO fraud, which accounted for £12.1m in 2021 (an increase of 165%). The area which accrued the largest total losses was investment scams, which swindled people out of £171.7m in total.
UK Finance also expressed the importance of data analysis and information sharing on emerging threats, data breaches and compromised card details between financial institutions. The industry has proposed new powers on information and intelligence sharing to make it easier for regulated sector firms to do this.
“The upcoming Economic Crime and Corporate Transparency Bill is an important development and provides the opportunity for the government to give new powers on information sharing and tracking stolen money,” said Worobec. “These are things we have long called for and will support efforts to work together and stop the fraud happening in the first place.”
You can read the full report here.
