Romance, investment, and bank frauds cost victims £1.3 billion last year, while cyber-crime increased by up to 165 percent as a result of the shutdown.
According to statistics from an industry trade association, about 200,000 consumers were duped into sending money directly to criminals in 2021.
According to UK Finance, authorized push payment (APP) fraud cost the country £583.2 million last year, a 39 percent increase over the £420.7 million in APP losses that were reported in 2020.
Nearly 40% of these losses were the result of impersonation frauds, which affected both personal (£505.8 million) and non-personal or company (£77.4 million) consumers.
Along with invoicing and romance scams, money was also lost as a result of investment and purchase scams.
Less than half (47%) of losses—£271.2 million—of those attributable to APP scams were reimbursed to victims.
In 2021, 195,996 instances of APP frauds were reported by UK Finance. 188,964 of these incidents included personal accounts, whereas 7,032 involved non-personal accounts.
In order to fool consumers into giving over their personal and financial information, criminals impersonated a variety of organizations, including the NHS, banks, and government offices, using phone calls, text messages, emails, phony websites, and social media postings, according to UK Finance. They persuaded consumers to approve a payment using this information.
Numerous banks have agreed to a voluntary policy on APP scams that pays out to victims when neither they nor their bank are at fault.
However, there have been issues with the code’s inconsistent application.
The Financial Services and Markets Bill has provisions that will allow the Payment Systems Regulator (PSR), as previously stated by the Government, to oblige banks to cover APP scam losses.
Banks can also participate in the “159” trial program, which encourages customers to hang up on potentially fraudulent phone calls and dial 159 instead to reach their bank.
51 percent, or £238.1 million of damages, were refunded to clients last year when only situations handled under the voluntary guidelines were included, the study stated.
According to UK Finance, over £1.3 billion was taken overall in 2021 through fraud and scams.
Payment card, remote banking, and check unauthorised financial fraud losses combined totaled £730.4 million in 2021, a 7 percent decline from 2020.
According to UK Financial, the banking and finance sector avoided an additional £1.4 billion of unauthorised fraud from reaching criminal hands last year, which works out to 65.3p of every £1 of attempted unauthorised fraud being stopped without a loss.
It asserted that it has long advocated for more comprehensive cross-sector action to combat fraud and that it will continue to collaborate with the government on impending legislation in this area.
One of the most well-known fraud examples featured a con artist who pretended to inject a 92-year-old lady with a coronavirus vaccine before charging her £160.
One of the victim’s relatives informed MailOnline that the con artist contacted to make sure the woman in Surbiton, South London, was elderly, frail, and lived alone.
When the elderly woman was poked in the arm with a “dart-like object,” police originally thought the “scumbag” criminal had been going door to door.
But it has since come to light that he is said to have called his victim while initially assuming the identity of an NHS worker in order to learn more about her living circumstances at her £500,000 property.
He said he was administering vaccines and is then believed to have quickly made an appointment to see her after she volunteered the information that she lived alone.
Katy Worobec, managing director of economic crime at UK Finance, said: ‘Unauthorised fraud losses fell last year, but this type of criminal activity remains a major problem.
‘Through the introduction of new measures such as strong customer authentication, coupled with continued investment in technology, the banking and finance industry prevents significant amounts of fraud from taking place.
‘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.
‘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.
‘These are things we have long called for and will support efforts to work together and stop the fraud happening in the first place.’
UK Finance is urging customers to follow the advice of the Take Five to Stop Fraud campaign, and remember that criminals are experts at impersonating people, organisations and the police.
They will spend hours researching people for their scams and may try to pressure people into making a decision they later regret.
People should contact their bank immediately if they think they have fallen for a scam and report it to Action Fraud.
Emma Lovell, chief executive of the Lending Standards Board (LSB), which oversees the voluntary APP scams reimbursement code, said: ‘The key question all sectors and industries should be asking is how can we stop APP scams occurring in the first place?
‘No-one should be out of pocket because of criminal activity. Evidence shows scams impact victims’ mental health, leaving long-lasting feelings of guilt and shame.
‘Reimbursement alone cannot reverse this damage, nor does it reverse the fact that the proceeds of scams often fund organised and other serious crime.’
Here is how various types of authorised fraud losses added up in 2021, according to UK Finance, and the annual percentage increase:
- Investment scam, £171.7 million, 57%
- Impersonation scam: Police/bank staff, £137.3 million, 51%
- Impersonation scam: Other, £77.5 million, 39%
- Purchase scam, £64.1 million, 25%
- Invoice and mandate scam, £56.7 million, minus 17%
- Advance fee fraud, £32.1 million, 45%
- Romance scam, £30.9 million, 73%
- CEO fraud, £12.7 million, 165%