UK Finance has warned that the country faces a “national security threat” as bank customers have lost £754million to various scams over the first half of 2021. This represents a 30 percent rise over the same period in 2020, suggesting the pandemic has exacerbated already-existing fraud schemes. According to the financial body, scammers are targeting bank customers as young as 14 years of age through social media.
Unauthorised fraud losses from scams amounted to £398.6 million over the first six months in 2021, which is an increase of seven percent.
Authorised push payment (APP) fraud losses came to £355.3million, which is an increase of 71 percent.
AAP fraud includes investment scams, impersonation fraud, romance fraud and purchase scams.
Katy Worobec, Managing Director of Economic Crime at UK Finance, outlined the severity of the danger facing the finances of many members of the public.
Ms Worobec said: “Our latest figures show the sheer scale of fraud taking place in the UK and highlight clearly the need for coordinated action to address this threat.
“The banking and finance industry invests billions in advanced systems to try and stop fraud happening in the first place, but criminals are exploiting weaknesses outside of banks’ control to trick customers into making payments directly to them.
“This is why we are calling for coordinated action and increased efforts from the Government and other sectors to tackle what is now a national security threat.”
Many experts including David-Jan Janse, CEO of Payments Fraud Prevention at SurePay believe this dramatic rise in AAP fraud should not be happening at all.
Mr Janse explained: “APP fraud will continue to rise due to the pandemic, forcing people to adopt new payment methods.
“Last year, we witnessed two important events: an e-commerce boom and the near death of cash – together pushing payments online.
“There are many benefits associated with digital payments, however, risks are also greater.
“Fraudsters are taking advantage of people having to use new payment methods because of the pandemic. These are individuals less likely to spot a scam when they’re being targeted.”
According to Mr Janse, the UK Government has options available to them in order to protect bank customers from further harm.
The financial expert said: “Back in 2017, Dutch banks introduced a Confirmation of Payee solution (named IBAN-Name Check) in order to offer better protection to their customers.
“Now nearly the entire Dutch market is covered by this service, resulting in an 81 percent drop in reported fraud/scams and a 67 percent drop in misdirected payments, according to the analysis of nearly four billion checks we have performed in the Netherlands.
“The UK could follow this example and, if more banks and PSPs adopt Confirmation of Payee, there will be less pressure on the regulator to mandate any other more restrictive measures.”
How to protect yourself from fraud
While the Government may have the power to implement new measures to look after bank customers, Britons also have ways they can try protect themselves from financial fraud and scams.
In its effort to warn people on the dangers posed by fraudsters, UK Finance has launched its Take Five to Stop Fraud campaign.
The new initiative encourages bank customers to be overly cautious when it comes to accepting and receiving any communication regarding their finances, as scammers could do their research on people they are targeting.
“Stop: Taking a moment to stop and think before parting with your money or information could keep you safe.
“Challenge: Could it be fake? It’s ok to reject, refuse or ignore any requests. Only criminals will try to rush or panic you.
“Protect: Contact your bank immediately if you think you’ve fallen for a scam and report it to Action Fraud.”