UK Finance fraud report: Criminal gangs steal £1.3 billion

UK Finance has released its latest fraud report covering 2021. The report shows the scale of fraud taking place as well as how criminals took advantage of people’s doubts and fears during the pandemic to commit fraud, often by exploiting weaknesses outside of the banking system.

A total of over £1.3 billion was stolen through fraud and scams in 2021: unauthorised fraud was £730.4 million and authorised push payment (APP) fraud was £583.2 million, with nearly 40% of APP losses due to impersonation scams.

The banking and finance industry prevented a further £1.4 billion of unauthorised fraud from getting into the hands of criminals.

Given that much of the fraud is initiated from criminal activity taking place through online and technology platforms, UK Finance and its members have long-been calling for greater cross-sector action to tackle the problem and will continue working with the government on upcoming legislation in this area.

“Fraud has a devastating impact on victims and the money stolen funds serious organised crime, as well as imposing significant costs on the wider economy,” says Katy Worobec, managing director of Economic Crime at UK Finance.

“Unauthorised fraud losses fell last year, but this type of criminal activity remains a major problem. Through the introduction of new measures such as strong customer authentication, coupled with continued investment in technology, the banking and finance industry prevents significant amounts of fraud from taking place.

“Authorised fraud losses rose again this year as criminals targeted people through a variety of sophisticated scams, with much of the criminal activity taking place outside the banking sector, often involving online and technology platforms. This is why we continue to call for other sectors to play a greater role in helping protect customers from the scourge of fraud.

“The upcoming Economic Crime and Corporate Transparency Bill is an important development and provides the opportunity for the government to give new powers on information sharing and tracking stolen money. These are things we have long called for and will support efforts to work together and stop the fraud happening in the first place.”

2021 fraud losses

Unauthorised fraud: here the account holder themselves does not provide authorisation and the transaction is carried out by a criminal (for example, the victim’s card details are used without their knowledge or consent).

Unauthorised financial fraud losses across payment cards, remote banking and cheques totalled £730.4 million in 2021, a decrease of 7% compared to 2020.
Victims of unauthorised payment card fraud are legally protected against losses. Industry analysis shows customers are refunded in excess of 98% of all confirmed cases.

Authorised push payment (APP) fraud: here the customer is tricked into authorising a payment to an account controlled by a criminal.

In 2021, criminals impersonated a range of organisations such as the NHS, banks and government departments via phone calls, text messages, emails, fake websites and social media posts to trick people into handing over their personal and financial information. They subsequently used this information to convince people into authorising a payment.

There were 195,996 incidents of APP scams in 2021 with gross losses of £583.2 million, including:

£214.8 million lost to impersonation scams, whereby criminals impersonate a range of organisations to trick people into giving away their personal and financial information. This was the largest category of APP losses.
£171.7 million lost to investment scams, the second largest category of APP losses.
99,733 cases of purchase scams, which means this was the most common type of scam – accounting for 51% of all cases – although total losses were £64.1 million.

A total of £271.2 million of losses were returned to victims of APP scams, accounting for 47% of losses.

UK Finance also collects data on cases assessed under the APP voluntary code. As a subset of the total amount refunded above, £238.1 million of losses were returned to victims under the APP code, accounting for 51% of losses in these cases.

Further details on the authorised and unauthorised fraud figures can be found in the table below.