UK Finance has releases its Annual Fraud Report, detailing the amount reported by UK Finance members, of money stolen by criminals through financial fraud in 2022.
Over £1.2 billion was stolen through fraud in 2022, a reduction of 8% on 2021. The number of fraud cases across the UK was down 4% to almost 3 million cases.
Unauthorised financial fraud losses across payment cards, remote banking and cheques totalled £726.9 million in 2022, a decrease of less than 1%.
Banks and card companies prevented £1.2 billion in unauthorised fraud in 2022. This represents incidents that were detected and prevented by firms and is equivalent to 61.5p in every £1 of attempted fraud being stopped.
In addition to this, there were 207,372 incidents of authorised push payment (APP) scams reported in 2022 with gross losses of £485.2 million, compared with £583.2 million in 2021.
Unauthorised fraud
Within the total figure, unauthorised fraud losses across payment cards, remote banking and cheques reached £726.9 million in 2022, a decrease of less than 1% compared to 2021.
Remote purchase fraud, where a criminal uses stolen card details to buy something online, over the phone or through mail order, remains the biggest category of losses at £395.7 million – although this figure was again down on the previous year.
Fraud on lost and stolen cards increased by 30% to £100.2 million and card ID theft, where a criminal opens or takes over a card account in someone else’s name, almost doubled to £51.7 million.
Authorised fraud
Authorised push payment (APP) fraud losses reached £485.2 million, down 17% compared to 2021. Within this, 57% of all reported cases related to purchase fraud, with case volumes breaking 100,000 for the first time.
Investment fraud continued to be one of the largest proportion of APP losses (24%), although there was a 34% reduction compared with 2021. Overall, the amount of APP fraud losses reimbursed increased by 5% in 2022 compared to the previous year.
The data collated by UK Finance for this report shows that in 2022 overall Authorised Push Payment (APP) reimbursement rates exceeded 50% for the first time, at an average across all typologies of 59%.
Nevertheless, the UK’s Payment Systems Regulator (PSR) has proposed a series of measures designed to enhance consumer protection even further.
The proposal being discussed aims to create additional financial protection for victims, with a liability split between the sending and receiving institutions – a world first. Additionally, the PSR plans include publicly sharing data on how frequently each bank refunds a victim.
Fraud origination
The banking and finance industry spends billions of pounds each year fighting fraud and economic crime. However, the majority of fraud originates outside the banking sector and UK Finance has conducted analysis on over 59,000 APP fraud cases to show the sources of fraud.
The analysis showed that 78% of APP fraud cases originated online – these tend to include lower-value fraud such as purchase fraud and therefore account for 36% of losses.
Social media platforms account for the greatest number of online fraud cases – around three quarters of online fraud starts on social media.
Meanwhile, 18% of fraud cases originate via telecommunications – these are usually higher value cases, such as impersonation fraud, and account for 44% of losses.
Given so much fraud is initiated from criminal activity taking place through online platforms and telecommunications, UK Finance and its members have long called for far greater cross-sector action to tackle the problem at source.
The UK is not alone in this problem though. According to the FTC in the US, consumers reported losing more than £3 billion to investment scams in 2022. That amount more than doubles the amount reported lost in 2021.
In Australia over £300 million was lost to scams in 2022. Over half that amount was from investment scams, followed by romance scams.
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