Financial fraud losses in the UK last year topped £20m a day – report
That's £768.8m down the drain
Financial fraud losses in the UK totalled £768.8m in 2016, up 2 per cent on 2015, according to Financial Fraud Action UK.
The figures, released on Thursday, cover losses from scams involving payment cards, remote (internet and telephone) banking and cheques. They also show that £1.38bn – equivalent to £6.40 in every £10 – of fraud last year was prevented.
Impersonation and deception scams, as well as hacking and malware, remained the main vectors in financial fraud last year. Payment card fraud caused by far the majority of losses at £618m, an increase of 9 per cent from £567.5m in 2015. Much of this (£432.3m) was down to fraudulent e-commerce purchases.
Card fraud as a proportion of spending equates to 8.3p for every £100 spent, according to FFA UK.
Remote banking fraud losses totalled £137.1m, a 19 per cent decrease from £168.6m in 2015. Cheque fraud losses fell by 28 per cent to £13.7m, the lowest ever annual total. The big reduction here is likely due to cheques in general becoming obsolete and making up a smaller slice of the payment pie.
There were a total 1,857,506 cases of financial fraud last year. The banking industry and consumers both need to up their game in order to contain losses that are taking an unhealthy slice out of the economy, according to experts.
Katy Worobec, director of Financial Fraud Action UK, said: "The payments industry can't stop all fraud on its own, so it's essential that every organisation with a role to play unites to tackle it. We are particularly working with law enforcement and government, through the Joint Fraud Taskforce. It's also vital for any organisation holding personal data to ensure they have robust systems in place to prevent data breaches.
"Across the industry, and with partners, we are developing new processes to help police intervene when potential victims visit a bank branch, and we are exploring new ways to track stolen funds moved between multiple bank accounts."
Phishing scams and other forms of social engineering, such as crooks phoning up victims and pretending to be from their bank's security department, remain among the main ways to harvest payment card details prior to making fraudulent purchases or transfers.
Tony Blake, senior fraud prevention officer at the Dedicated Card and Payment Crime Unit, said: "Fraudsters are often extremely professional, so it's important that you stay alert and guard your personal and financial details. Always take a moment to consider carefully any requests for your information and never disclose your security details, such as your PIN or full banking password. Criminals will do all they can to scare and pressure you into acting quickly without thinking. Don't let anyone rush you."
Financial Fraud Action UK leads the collective fight against financial fraud on behalf of the UK payments industry. Its membership includes banks, credit, debit and charge card issuers, and card payment processing firms.
John Marsden, head of ID and fraud at credit reference agency Equifax, commented: "Impersonation and deception scams, as well as online attacks to compromise data, dominated the fraud landscape during 2016.
"The UK is ahead of many other countries in improving fraud defences, but is also subject to a higher number of attacks and cannot afford to be complacent. As the tactics of fraudsters continue to evolve at an alarming rate, businesses need to focus on how they can keep up. The financial services industry in particular needs to continue working together to educate consumers and share information to help collectively tackle this activity, while also constantly improving their systems to both safeguard consumer personal data and implement appropriate steps to confirm transactions are being completed by genuine customers." ®