Enhanced anti-fraud measures curb the escalation of digital swindles
In the latest annual report from UK Finance, revelations have surfaced that criminal activities resulted in a staggering £1.17 billion in losses last year, a sum similar to the previous year's report, despite an increase in online scams. Despite this, the report noted a decrease in fraud losses through authorised push payment (APP), dipping by 2% to £450.7 million, while cases fell by 20% to around 186,000. This marks the lowest figure since 2020.
The report attributes this decline to several factors, including significant investments in technology that can identify and flag potentially fraudulent activities, as well as efforts to educate and raise awareness among consumers. However, the persistently high number of online scams continues to impact consumers, with 70% of all fraud cases starting online.
For the year 2023, there were 3.1 million confirmed cases of unauthorised fraud, marking a 14% increase compared to the previous year, with losses amounting to £722 million, according to the banking trade body's data. Remote purchase fraud cases increased by 22% to nearly 2.6 million, and losses increased by 11% to just under £400 million.
Despite these high levels of fraud, British banks managed to prevent £1.45 billion of unauthorised fraud in 2024. The report credits stronger security systems for this prevention.
Ben Donaldson, Economic Crime Managing Director at UK Finance, commented, "The financial services industry remains committed to protecting customers and preventing billions from being stolen by fraudsters, yet we understand that criminals are incessantly exploring new ways to deceive victims." He advocates for a more proactive approach, with closer collaboration between the public and private sectors, underscoring the need for technology and telecom sectors to play a more active role.
Dal Sahota, head of trusted payments at LSEG Risk Intelligence, echoed this sentiment, asserting, "Prevention must be the ultimate goal. Banks, tech firms, retailers, and telecoms must work collectively, implementing real-time payee checks and stronger identity verification, to halt fraud before it starts."
Emma Shafton, a fraud expert at law firm Reed Smith, commented on the results, stating, "The report underscores the ongoing fraud crisis in the UK." She expanded, "The anti-fraud agency Serious Fraud Office (SFO) and other prosecutors now have new tools, and they will certainly make use of them." She cited the recent introduction of two new corporate criminal offences under the Economic Crime and Corporate Transparency Act 2023, which include the 'Failure to Prevent Fraud' offence that makes large organisations criminally liable if associated persons commit fraud for the organisation's benefit, and the extension of corporate liability for economic crimes committed by senior managers.
The new offences, notably the 'Failure to Prevent Fraud' offence, will come into force on 1 September 2025, and the SFO, among other prosecutors, are expected to launch significant investigations over the coming year.
- Despite a decrease in fraud losses through authorized push payment (APP), the report emphasizes a persistently high number of online scams that continue to impact consumers in the field of finance and business.
- In the upcoming year, the financial services industry will implement stronger security systems and collaborate more closely with the technology, telecom, and retail sectors to prevent fraud and reduce losses.
- British banks managed to prevent £1.45 billion of unauthorised fraud in one year, underscoring the industry's commitment to protecting customers and preventing fraudsters from stealing billions.
- The anti-fraud agency Serious Fraud Office (SFO) and other prosecutors will make use of new tools introduced by the Economic Crime and Corporate Transparency Act 2023, including the 'Failure to Prevent Fraud' offence, to investigate corporate criminal activities related to fraud.
