Research published by trade association UK Finance has revealed that, during the first half of this year, criminals stole £503.4 million from the UK public via fraud and scams.
Over the same period, the UK finance industry helped to ‘prevent £705.7 million of unauthorised fraud’, the research found.
So-called ‘purchase scams’ proved to be the most prevalent type of crime, accounting for £19.4 million of the total amount stolen. Purchase scams involve a victim paying in advance for an item or a service, such as a car or a hotel room, and subsequently never receiving or being able to make use of it.
The research also revealed that, in the first half of 2018, there were 3,866 reported cases of ‘impersonation scams’. As part of this type of scam, the criminal purports to be from an authority, such as the police, and tricks their victim into transferring money.
The average loss resulting from impersonation scams amounts to £11,402, according to UK Finance.
Commenting on the research, Katy Worobec, Managing Director of Economic Crime at UK Finance, said: ‘Fraud and scams pose a major threat to our country. The criminals behind it target their victims indiscriminately and the proceeds go on to fund terrorism, people smuggling and drug trafficking, whether or not the individual is refunded.
‘The finance industry is committed to fighting back, investing millions in security systems and cyber defences to protect customers.’
Data published by Action Fraud has revealed that UK consumers lost £2 million to cryptocurrency scams during June and July.
According to Action Fraud, criminals are using social media platforms in order to advertise ‘get rich quick’ investment schemes and trading in cryptocurrencies.
Criminals convince their victims to register with cryptocurrency websites and supply their personal information, such as credit card details, in order to open a trading account. The victim is then asked to make an initial minimum deposit, with the criminal subsequently calling the individual to persuade them to invest again to ‘achieve a greater profit’.
In many instances victims realised they had been defrauded only after the cryptocurrency website was deactivated.
203 reports of cryptocurrency fraud were filed with Action Fraud between 1 June 2018 and 31 July 2018, with the amount lost to this form of fraud totalling £2,059,501.29.
‘It’s vital for anyone who invests or is thinking of investing in cryptocurrencies to thoroughly research the company they are choosing to invest with,’ said Pauline Smith, Director of Action Fraud.
‘The statistics show that opportunistic fraudsters are taking advantage of this market, offering investments in cryptocurrencies and using every trick in the book to defraud unsuspecting victims.’
Individuals who believe they have been affected by cryptocurrency fraud are urged to contact Action Fraud.
Contactless card fraud increased to £5.6 million in the first half of 2017, the latest figures published by UK Finance show.
This figure comprises money stolen using the contactless function on both credit and debit cards, as well as from mobile services, such as Apple Pay. The current maximum spending limit for contactless payments is £30. Some retailers have called for this to be raised to £50 – however, finance experts are in agreement that the limit should not rise.
Sarah Lewis, Head of ID and Fraud Strategy at Equifax, said: ‘I think the £30 limit is sensible and it is safer for it to be kept at this level. If it increases, there’s more incentive for criminals to steal contactless cards, and the level of contactless fraud is likely to increase.’
Although the contactless card fraud figures appear to be significant, they are relatively low compared to the overall amount of money spent using this method of payment: around £23.23 billion was spent using contactless cards in the first half of 2017. However, with this method of payment becoming increasingly popular, and with experts stating that ‘cash and cheques are dying out’, this type of fraud is likely to increase.
Research carried out by price comparison site comparethemarket.com has revealed that more than £1 billion has been stolen from bank accounts through credit and debit card fraud in the past year.
The research found that one in ten individuals have cancelled their credit card or debit card as a result of attempted fraud, and that five million consumers have been victims of cybercrime in the past year.
It found that the average amount stolen from individuals was £544, and that more than a third of consumers who have had money stolen in the past year have been victims of credit card or debit card fraud before.
Additionally, over half of consumers surveyed believe that the government isn’t doing enough to tackle cybercrime, comparethemarket.com revealed.
Commenting on the issue, Shakila Hashmi, Head of Money at comparethemarket.com, stated: ‘Digital banking is the new frontier for criminal activity, and whilst banks will be doing their best to prevent fraud, people should ensure that they are doing everything they can to protect themselves.’
Data published by credit service agency Experian has suggested that fraudulent activity now costs the UK £190 billion per year.
The Annual Fraud Indicator 2017 found that fraud in the public sector costs the UK an estimated £40.3 billion, whilst fraud in the private sector costs the UK economy £140 billion.
Charities lost £2.3 billion as a result of fraud in 2017, while individuals have been duped out of £6.8 billion. The data revealed that fraud is currently the UK’s most common criminal offence.
Experian warned that technology ‘continues to open up new avenues for fraudulent activity’. Criminals’ behavioural patterns are also changing in response to the rise in popularity of online banking, the research revealed.
Nick Mothershaw, Director of Fraud and Identity Solutions at Experian, commented: ‘Awareness of the dangers fraud poses is growing, but the total of £190 billion is startlingly high. Plastic card and online banking fraud continues to increase, so new regulations which make it harder for fraudsters to use someone’s cards online are a necessary step.
‘Fraudsters are shamelessly opportunistic and are now turning their attention to the pensions release, lured by the promise of high value returns when their scams are successful.’
A survey conducted by the Financial Conduct Authority (FCA) has revealed that more than a fifth of individuals who were contacted in regard to a fraudulent investment failed to report it.
The FCA surveyed a group of over-55s, and found that only 63% of individuals would report an investment scam to the authorities.
49% of those surveyed stated that they would not know who to report a scam to.
The FCA is encouraging the public to get in touch if they have been contacted by a firm offering fraudulent investments. The Authority keeps a list of potentially fraudulent firms that operate without authorisation: this can be found here.
Addressing the issue, Mark Steward, Director of Enforcement at the FCA, said: ‘It’s clear to see that by reporting suspicious investment schemes to the FCA, people are having a direct impact in helping to stop fraudsters exploiting others. But there is still more we can all do and we need the public’s help.
‘We are encouraging people to speak out on behalf of their family or local community, just like they would report a crime in their local area.’
Investment scams can be reported to the FCA using its ScamSmart website.
In a new report, the Public Accounts Committee (PAC) has urged HM Revenue & Customs (HMRC) to take steps to combat online VAT fraud in the UK.
In its report, the Committee discovered that sellers based outside of the EU are neglecting to charge VAT, and therefore are able to undercut the prices set by UK businesses ‘by up to 20%’. It found that online VAT fraud committed by overseas sellers is costing UK businesses and taxpayers over £1 billion each year.
Within the report, the PAC criticised HMRC for being ‘slow to respond to the growing risk of VAT fraud by online sellers’.
It has outlined a series of steps that HMRC could take to help combat online VAT fraud, including producing an updated estimate on the scale and impact of the online VAT fraud ‘tax gap’, speeding up the introduction of new VAT measures and setting short and long-term targets for reducing the amount of VAT lost through non-compliant sales.
Commenting on the matter, Meg Hillier, Chair of the PAC, said: ‘HMRC needs to be far tougher in protecting the interests of British businesses and taxpayers. As a priority, it must inject more urgency into enforcement action. But it should also push the case for further new powers.’
In response, a spokesperson for HMRC stated: ‘We introduced tough new rules last year allowing us to hold online marketplaces liable for unpaid VAT by overseas sellers and since then we have seen a tenfold rise in the number of sellers registering for VAT.’