Scammers shift their focus away from the banking system

The latest fraud data covering the first half of the year confirms the importance of staying safe online and during face-to-face interactions.

Industry body UK Finance shared the data, demonstrating how fraudsters are changing their focus, exploiting weaknesses outside the banking system.

Historically, the most significant fraud losses came from unauthorised payment card use.

This year, criminals have shifted their attention to a type of fraud known as authorised push payment (APP) fraud.

In APP fraud, someone is tricked into authorising a payment to a bank account controlled by a criminal.

In these scams, the criminal’s activity takes place outside the banking system.

Criminals use tactics including scam phone calls, text messages and emails, along with fake websites and social media posts, to convince their victims into handing over personal details and passwords.

Once they possess this information, the criminals then target their victims and convince them to authorise payments to a bank account under their control.

UK Finance witnessed a 71% increase in APP fraud during the first half of the year, compared to last year.

For the first time, the total stolen via APP fraud exceeded card fraud losses.

The data also shows changes in how criminals move stolen money. The fraudsters target children as young as 14, using social media platforms, and recruiting these teenagers as ‘money mules’.

A money mule uses their bank account to launder the proceeds of crime, with intelligence reports suggesting a significant increase in the use of cryptocurrency wallets to remove money from the banking system.

Fraud now represents a national security threat, with the banking and finance sectors calling for government-coordinated action to tackle the issue. UK Finance wants all economic crime brought within the scope of the new Online Safety Bill.

Katy Worobec, Managing Director of Economic Crime at UK Finance, said:

“Our latest figures show the sheer scale of fraud taking place in the UK and highlight clearly the need for coordinated action to address this threat. The banking and finance industry invests billions in advanced systems to try and stop fraud happening in the first place, but criminals are exploiting weaknesses outside of banks’ control to trick customers into making payments directly to them.

“This is why we are calling for coordinated action and increased efforts from government and other sectors to tackle what is now a national security threat.

“Criminals continue to target customers with a variety of scams, often via online platforms, and it is only through coordinated action that we will be able to really make progress in addressing the problem.”

UK Finance encourages people to follow the advice of the Take Five to Stop Fraud campaign and remember that criminals are experts at impersonating people, organisations and the police.

Scammers spend hours researching you for their scams, hoping you will let your guard down for just a moment. Stop and think. It could protect you and your money.

Stop: Taking a moment to stop and think before parting with your money or information could keep you safe.

Challenge: Could it be fake? It’s ok to reject, refuse or ignore any requests. Only criminals will try to rush or panic you.

Protect: Contact your bank immediately if you think you’ve fallen for a scam and report it to Action Fraud.