UK Records $1.5 Billion in Fraud in 2022

Fraudsters stole more than £1.2 billion ($1.5 billion) in the U.K. last year, down 8% since 2021.

That’s according to new findings from UK Finance, which also concluded that 78% of authorized push payment (APP) fraud begins online, with another 18% starting via telecommunications. The report also found that the banking and finance sector prevented another $1.5 billion in unauthorized fraud from reaching criminals.

“Our data also makes clear just how much fraud emanates from online platforms and through telecommunications,” said David Postings, chief executive at UK Finance.

“The government’s new fraud strategy rightly says we need to focus on stopping it at source and that these other sectors need to do far more to tackle the problem they are facilitating.”

According to the report, APP fraud was driven by abuse of online platforms, including things like investment scams advertised on search engines and social media, and scams committed against people using dating platforms.

“Criminals used scam phone calls, text messages and emails, as well as fake websites and social media posts, to trick people into handing over personal details and passwords,” the report said. “They subsequently used this information to convince people into authorizing a payment. “

As PYMNTS reported earlier this month, Great Britain has been plagued by a payments fraud epidemic in recent years. To combat this, regulators in the U.K. are preparing to require banks to reimburse victims of APP fraud.

“But while refunding victims could be seen as a step in the right direction, experts have flagged a moral hazard risk as the rules could make individuals less inclined to take the necessary precautions when making payments,” PYMNTS wrote.

In an interview with PYMNTS, Suzie Miles, partner at U.K. law firm Ashfords, acknowledged the impact these rules could have on frictionless banking transactions but argued that placing a greater responsibility on financial institutions to prevent fraud is not out of place.

“Given that banks are best placed to mitigate the risk, I can understand why this approach has been taken,” Miles said in an interview, noting that the wider payment-service provider (PSP) arena will need support to make sure the rules yield the intended results.

Miles added regulations such the APP fraud rules give banks, PSPs and other players in the financial service sector a chance to review their internal processes and enhance security to better protect users against fraud.

“It’s an opportunity for players to look at what they’re doing and what happens if something goes wrong. That’s what underpins a lot of regulation — the need to try and protect the economy, protect consumers, and stabilize whatever it is that has been regulated,” Miles told PYMNTS.