Fraudsters were less successful with their scam activity in 2023 but still managed to steal £3.2m a day, new figures from UK Finance have suggested.
The amount lost to scams and the number of fraud cases both fell year-on-year. However, criminals still extracted almost £1.17bn from their victims last year, a figure described as "shocking" by experts. Some newer forms of scam also saw marked increases in the number of successful, or partially successful, fraud attempts.
UK Finance, which represents most of the UK’s biggest financial services companies, said actions by its members had prevented a further £1.2bn of fraud losses where the victim was not involved in the scam itself - a rise of 7% compared to 2022. It means 64p in every £1 was saved from attempted unauthorised fraud last year, the trade body said.
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It comes amid several warnings about potential criminal activity this summer. With major music events, such as Taylor Swift’s Eras Tour and Glastonbury, the UK’s official scam prevention agency Action Fraud has urged fans to be on the lookout for ticket fraud.
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It has also warned of “increasingly sophisticated” tactics to illegally extract cash from holidaymakers. There are also concerns about the number of people being targeted over social media, as well as through WhatsApp and artificial intelligence (AI).
Scam losses down again, but APP fraud on rise
UK Finance’s figures showed there was a second consecutive year of falls in the number of scams and the amounts that were taken in 2023. The near-£1.17bn stolen last year marked a reduction of more than £40m (4%) on 2022’s data, and almost £145m (11%) on 2021’s losses.
Meanwhile, cases fell 1% overall to 2,967,363 year-on-year, and were 2% (50,000) lower compared to two years ago. But instances of Authorised Push Payment (APP) fraud - where victims are tricked into sending money to criminals - actually grew 12% to its highest recorded level on record 232,429.
Purchase scams, where people are tricked into paying for goods that they never receive, were the biggest driver of the jump in the number of APP cases. They leapt 34% to 156,000, with the amount lost to them growing 28% to £85.9m.
Another form of APP fraud, romance scams, also hit a record high after growing 14% year-on-year to 4,160 cases, with 84% of these occurring online through social media or dating apps. Criminals who convince their victims that they are in a romantic relationship managed to steal £36.5m - an extra £5m (17%) compared to 2022’s figure. This was also more than double the amount stolen in this manner in 2020, which was the first year UK Finance started reporting on this form of scam.
In better news, the sums lost to APP crimes dropped 5% (£25m) overall to £459.7m. Once business APP cases were stripped out, the figure came in 8% (almost £32m) below 2022’s figures.
One of the main reasons for this decline was a fall in impersonation scams. These occur when a criminal pretends to be from the police or a bank and convinces their victim that they need to transfer their money in order to keep it safe - often over the phone.
The amount lost to this sort of scheme plummeted 28% (more than £30m) year-on-year to just under £79m. The total number of cases dropped 37% to 10,594 - around half the number recorded in 2020. The trade body said the fall was likely to be down to greater awareness of impersonation scams among consumers, and the introduction of warning messages during mobile banking transactions.
The amount UK Finance members returned to victims grew 1% (almost £2m) overall to £287.3m. It means 62% of all APP losses were returned to victims - up from 59% in the previous year, and 45% in 2020.
Card ID theft and mobile banking fraud on the up
Unauthorised fraud, which accounts for a higher number of cases and losses than APP scams, saw falls, both in terms of the number of reports made and the amounts stolen. These scams involve criminals conducting transactions without involving their victims.
The 2,734,934 instances of this sort of crime were 2% (45,000) below the number recorded in the previous year. And the £708.7m was a 3% (£18m) fall. But again, newer types of scam were shown to be on the rise.
Card ID theft, which occurs when criminals open or take over a card account using stolen personal details or a fraudulently obtained card, saw a massive 74% rise in reports. The 142,442 cases that were reported to UK Finance members (60,000 up year-on-year), saw £79.1m stolen - a 53% (£27m) rise compared to 2022. However, there are hopes that recent moves by card providers to extend expiry periods on credit and debit cards will reduce this type of fraud by dint of reducing the number of physical cards being used across the UK.
Mobile banking fraud was also shown to be on the up, with reported incidents growing 62% annually to more than 20,000 cases - more than three-times the number recorded five years ago. Losses grew by a third to £45.5m, with the trade body putting the increase down to the growing use of personal finance mobile apps.
Reacting to the findings, Ben Donaldson, managing director of economic crime at UK Finance, said: “The money stolen funds serious organised crime and victims often suffer emotional damage as fraud is a pernicious and manipulative crime.
“The financial services industry remains at the forefront of efforts to protect customers, prevent fraud and support those who fall victim. With reimbursement rules set to change we risk even more money getting into criminal hands, unless the technology and telecommunication sectors take prop action to stop the fraud that proliferates on their platforms and networks.”
The rule change coming in from October 2024 will see banks forced to fully reimburse victims of APP fraud, up to a maximum of £415,000.
UK Finance fraud report findings 'shocking'
Experts said the figures showed criminals were switching up their tactics. Laura Suter, director of personal finance at AJ Bell, said the report highlighted "how scammers are targeting more victims for smaller amounts of money".
But she added that they may not paint a full picture of scam activity in the UK. “These figures all have to be taken with a pinch of salt, as we know that the official fraud stats are the tip of the iceberg when it comes to the true scale of fraud in the UK," Suter said. "So often people feel embarrassed or ashamed of being defrauded and therefore don’t report it, while others assume that nothing can be done to get their money back, so it goes unreported."
Suter urged any victims to contact Action Fraud and their bank. Doing so could mean they get some or all of their money back.
Consumer group Which? described UK Finance's findings as "shocking". Rocio Concha, its director of policy and advocacy, said: "[It] underlines the huge amount of work the government and businesses in different sectors must do to get a grip on this crisis as a new generation of AI-powered scams emerges.
“The Online Safety Act should finally mean accountability and multi-million pound fines for tech firms that fail to stamp out scams on their platforms - but these companies must act ahead of new rules taking effect, as every day that passes means more lives devastated by fraud.
“Fraudsters can only operate where banks and payment providers fail to put effective security measures in place so ministers must resist calls from finance firms to slash the scam reimbursement limit for victims of authorised push payment fraud by more than 90 per cent and instead tell them to get their houses in order. The government rightly prioritises growth, but growth built on the backs of scam victims and financial crime is not acceptable."
Concha called on the next government to make fraud prevention a "national priority" and said an anti-fraud minister role should be created to work across Whitehall departments.
