An enormous £580 million was lost to fraudsters in the first half of 2023, with scammers continuing to cash in on innocent victims.
That’s according to the latest annual fraud report from UK Finance, the banking trade body.
There is some good news in those figures, in that the amount stolen through fraud was actually down by 2% on the same period in 2022.
While that is clearly heading in the right direction, it still represents enormous losses suffered by ordinary people at the hands of scammers.
In this article, we’ve picked out the main types of frauds you need to watch out for, and what you can do to protect yourself.
If you’ve been the victim of a scam, contact Action Fraud on 0300 123 2040.
Authorised push payment fraud ‒ £239.3 million
The size of this type of scam means there’s only one place to start: authorised push payment (APP) scams.
On the positive side, the amount lost was down by 1% compared to the same period of last year, but there has been a shocking jump in cases.
The report found there were 116,324 APP cases, a rise of 22%.
How an APP scam works
In an APP scam, criminals will attempt to trick someone into transferring money directly from their bank account to one that the criminal controls.
In order to gain the trust of victims, criminals will pretend to be from a trusted organisation, such as a person's bank or the taxman.
According to UK Finance, there has been a big spike in purchase scams here, where the scammer poses as a retailer and charges the victim for goods that never show up.
APP scams can be particularly devastating as there is little legal protection to cover them for losses because they willingly transferred the funds – unlike with an unauthorised transaction.
While many banks have signed up to a voluntary code that promises to reimburse APP victims, there have been issues around victim blaming.
As a result the Payment Systems Regulator is implementing a new scheme, which it claims will see payment service providers required to reimburse losses in all but exceptional cases.
UK Finance reckons that around two-thirds of the money lost to APP scams was returned to victims in the first half of the year.
You can learn all about APP scams, which banks are signed up to the voluntary code and more by reading this detailed guide.
Once the money has been transferred to the criminal’s account, they transfer it out to other accounts ‒ which are often located abroad ‒ where it is then cashed out.
Beware: warnings of “unusual activity on your account”
A reoccurring scam involves texts appearing to come from your bank warning of unusual activity.
You are led to a fake bank webpage and asked to log in to your account, at which point the crooks take your details.
Remote purchase (card not present) ‒ £173.8 million
This is where a criminal uses card details which have been stolen to make purchases online.
Thankfully both the number of cases and losses to this form of scam are down significantly, by 14% and 12% respectively, though that still means thousands of people are losing money as a result of them.
UK Finance has said that it tends to happen as a result of criminals using card details obtained through data theft, such as third-party data breaches and via phishing emails and scam text messages.
In addition, crooks have also taken advantage of the “increasing tendency” for shoppers to head to social media to try to find discounted products.
When a shopper attempts to buy the product advertised through a fake social media profile, the crook then uses the stolen card details to spend elsewhere.
To protect yourself, only use retailers you trust and check your internet browser: most have a padlock icon in the website address bar to indicate the site is secure.
Remote banking fraud ‒ £78.9 million
Remote banking fraud covers three types of fraud: internet banking, telephone banking and mobile banking.
It relies on the scammer gaining access to your account through one of these channels, and then making unauthorised transfers of your money.
Losses are about level with last year, while the number of cases is down by 29% on the same period of 2022.
UK Finance noted that this type of fraud peaked during the pandemic, but has been declining since lockdown restrictions were removed.
Remember that a genuine bank or organisation will never contact you out of the blue asking for your PIN or password, while it’s also important not to automatically click on links in emails or texts that arrive from an organisation unexpectedly.
UK Finance also pointed out that ensuring you have up-to-date security software on your devices is useful.
Lost and stolen card fraud - £48.3 million
The amount of money lost to fraudsters taking advantage of lost or stolen cards increased by 3% on last year, while there was also a marginal rise in the number of cases.
UK Finance noted that this fraud increased last year following the jump in the contactless limits, but activity has now levelled out.
It highlighted that the banking industry is continuing to utilise a range of tools to protect us from contactless card fraud, including the fact that from time to time cardholders are required to enter a PIN before they can conclude a purchase.
Beware: compromised ATMs
We’ve put together a list of signs that an ATM has been tampered with, including pictures of real-life examples. You can read it here.