Trade association UK Finance has revealed that more than 84,000 bank customers fell victim to so-called bank payment scams in 2018.
According to data published by UK Finance, in the first half of 2018, £93 million was transferred out of personal accounts to fraudsters, with the customer’s permission. In the second half of 2018, £135 million was transferred from bank accounts to criminals.
The data also revealed that criminals are shifting their attention from trying to penetrate the banking system to defrauding members of the public directly.
According to UK Finance, criminals are carrying out a range of fraudulent activities. Some fraudsters sell counterfeit or non-existent goods online, whilst others execute sophisticated scams in which they pretend to be a trader known to the customer, and demand payments.
Katy Worobec, Managing Director of Economic Crime at UK Finance, said: ‘We are seeing a shift away from some of the methods that fraudsters are using to try and attack banks’ security systems to focusing on the person and duping them into making the payment themselves.’
In 2018, banks reimbursed £83 million of the losses suffered by bank customers. However, the final bill for businesses and individuals totalled £354 million. Banks have agreed to follow a new voluntary code from May 2019, which will facilitate reimbursement if a victim has met ‘expected standards of behaviour’.
HMRC has urged UK households with a landline number to be vigilant following a significant rise in landline tax scams.
HMRC recently moved to crack down on email and SMS phishing scams. As a result, many criminals are now turning to the more traditional method of cold-calling publicly available phone numbers, including landline numbers.
The Revenue recently revealed that, in the six months to January 2019, it received more than 60,000 reports of phone scams – an increase of 360% when compared to the previous six months. According to HMRC, phone scams are typically targeted at the elderly and the vulnerable. Criminals often pose as HMRC to ‘add credibility’ and convince their victims.
HMRC has been working with phone networks and regulator Ofcom to close nearly 450 phone lines that have been used by criminals. Ofcom estimates that 26 million homes have a landline, many of which could be at risk from scams.
Commenting on the issue, Mel Stride, Financial Secretary to the Treasury, said: ‘If you receive a suspicious call to your landline from someone purporting to be from HMRC which threatens legal action, to put you in jail, or payment using vouchers: hang up and report it to HMRC, who can work to take them off the network.’
Any suspicious emails, phone calls or text messages received should be reported to HMRC or Action Fraud.
The government has launched a new economic crime taskforce, which will work to combat fraud, bribery, money laundering and corruption.
The government estimates that economic crime costs the UK ‘at least’ £14.4 billion per year. In order to tackle this type of crime, a new Economic Crime Strategic Board will be created, and will be chaired by both Chancellor Philip Hammond and the Home Secretary, Sajid Javid.
In order to set priorities, direct resources and scrutinise performance against the threat of economic crime, the Economic Crime Strategic Board intends to meet twice a year. The Board includes chief executives from the UK’s largest banking institutions, as well as representatives from trade association UK Finance and the National Crime Agency (NCA).
Commenting on the taskforce, the Chancellor said: ‘The UK is leading the world in the fight against illicit finance, preventing fraudsters from stealing billions from the public each year.
‘By bringing together specialists across the public and private sector, we can use the best of our expertise to maintain our status as a global financial centre.’
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.’