More than £1.2bn lost to fraud in the UK in 2022

Its annual report said this is equivalent to losses of more than £2,300 every minute in the UK, with most cases occurring online.

Despite this, the banking and finance industry prevented a further £1.2 billion of unauthorised fraud from getting into the hands of criminals, with the total number of cases down by four per cent to almost three million. Total losses were also down, by eight per cent compared with 2021.

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 one per cent compared with the previous year.

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 per cent 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. Victims of unauthorised fraud cases such as these are legally protected against losses.

Authorised push payment (APP) fraud losses reached £485.2 million, down 17 per cent compared with 2021. Within this, 57 per cent 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 per cent), although there was a 34 per cent reduction compared with 2021. Overall, the amount of APP fraud losses reimbursed increased by five per cent in 2022 compared to the previous year.

UK Finance says while the banking and finance industry spends billions of pounds each year fighting fraud and economic crime, the majority of fraud originates outside the banking sector.

Analysis by UK Finance showed that 78 per cent of APP fraud cases originated online – typically lower-value fraud such as purchase fraud which account for 36 per cent of losses.

Social media platforms account for the greatest number of online fraud cases – accounting for around three quarters of crimes.

Meanwhile, 18 per cent of fraud cases originate via telecommunications – these are usually higher value cases, such as impersonation fraud, and account for 44 per cent 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.

David Postings, chief executive at UK Finance, said:  “Fraud has a devastating impact on victims and over £1.2 billion was stolen by criminals last year.

“The banking and finance sector is at the forefront of efforts to tackle this criminal activity. The sector spends billions on detection and prevention and also refunds people who have fallen victim, even if the fraud originated outside the banking system.

“Our data also makes clear just how much fraud emanates from online platforms and through telecommunications. 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.”

Daniel Holmes, Fraud Prevention SME at Feedzai, specialists in fighting financial crime using  artificial intelligence, said: “We are able to see some positive signs such as overall fraud losses coming down, but rapid changes in technology bring us to a new and critical inflection point in the fraud space.

“The risks remain elevated as fraudsters adapt and use increasingly sophisticated tactics and technology to fool consumers. This report highlights the importance for banks to maintain their focus on combining the latest anti-fraud technology with an approach that puts consumer education at the core.

“We also need a broad coalition of effort from beyond financial services to tackle fraud. This combination will give us the best chance possible to stop fraud at its source, and minimise the impact on consumers.”

The Government’s fraud strategy published earlier this month includes action to block fraudulent communications at their source and allow suspect payments to be delayed.

It will include banning cold calls on all financial products, such as those relating to insurance or sham cryptocurrency schemes.

The Government also plans to work with Ofcom to use new technology to further clamp down on number “spoofing”, so fraudsters cannot impersonate legitimate UK phone numbers.

Under the plans, banks will also be allowed to delay payments from being processed for longer to allow for suspect payments to be investigated.

The Government said it will also ban other devices or methods commonly harnessed by scammers to reach thousands of people at once – such as so-called “sim farms” and review the use of mass texting services to keep these technologies out of the hands of criminals.

Sim farms are devices that can be loaded with hundreds of sim cards and are controlled from a computer. Fraudsters use them to send thousands of scam texts at once.

To make it easier for victims to report fraud and rebuild confidence that cases are being dealt with properly, a new system, replacing the current Action Fraud service, the UK’s fraud reporting centre, will be up and running within the year.

A new National Fraud Squad will overhaul how scams are investigated by taking a proactive, intelligence-led approach, backed by 400 new specialist investigators.

Seventy per cent of fraud in the UK either starts overseas or has an international link, the Government said, adding that it will work bilaterally to raise fraud as a key priority.

While it welcomed publication of the Government’s new fraud strategy, the Association of Police and Crime Commissioners says it “fails to recognise” the “fundamental challenges” in investigating the crime and the devastating impact on victims.

And a leading law firm says a few hundred specialist investigators will “simply not be adequate” to address the current scale of fraud.

Louise Hodges, head of the Criminal Litigation practice at law firm Kingsley Napley, said: “As can be seen from the findings of the Economic Crime Survey 2020, fraud is a big problem, and one which has been exacerbated by years of under-investment.”

“Unfortunately, this fraud strategy, which puts forward a few hundred specialist investigators to tackle 40 per cent of all recorded crime, will simply not be adequate to address the current scale of economic crime.”