The Joint Fraud Taskforce will include Financial Fraud Action UK, the City of London Police, National Crime Agency, Bank of England, fraud prevention agency Cifas and the CEOs of the major banks including Barclays, HSBC, Royal Bank of Scotland and Lloyds Banking Group, as well as smaller lenders such as Metro Bank and Nationwide.

Its activities will include compiling a list of the top 10 fraudsters and organised fraud gangs they most want to catch; faster intelligence sharing between banks and law enforcement; the national roll-out of training for bank staff to help identify victims and potential victims; addressing the difficulties victims face in getting refunds; raising awareness of the steps people can take to prevent fraud; and identifying weaknesses in computer systems and processes which fraudsters can exploit.

The new taskforce will be announced by Home Secretary Teresa May at an event later today, which will include Mark Carney, governor of the Bank of England.  May is expected to say that ‘fraud shames our financial system’ and ‘undermines the credibility of the economy. For too long, there has been too little understanding of the problem and too great a reluctance to take steps to tackle it.’

Action Fraud, the UK’s national reporting centre for fraud and internet crime, which is operated by the City of London police, is warning businesses to be on high alert after increased reports and financial losses from CEO fraud.

It says from July 2015 until January 2016 it has received 994 reports on this issue, a marked increase, while a recent report from the City of London Police’s National Fraud Intelligence Bureau (NFIB) shows that over £32m has been reported to be lost as a result of CEO fraud.

Such scams typically start with an email being sent from a fraudster to a member of staff in a company’s finance department. The member of staff will be told by the fraudster who is purporting to be a company director or CEO that they need to quickly transfer money to a certain bank account for a specific reason. The member of staff will do as their boss has instructed, only to find that they have sent money to a fraudster’s bank account.

The fraudster will normally redistribute this money into other mule accounts and then close down the bank account to make it untraceable. Out of the £32m reported to be lost by businesses to CEO fraud, only £1m has been able to be recovered by the victims.

Action Fraud says this is due to businesses taking too long to discover that they have been the victim of fraud and the lost money already being moved by fraudsters into mule accounts. Most businesses reported initially being contacted via emails with gmail.com and yahoo.com suffixes, and the average amount stolen is £35,000.

However, one healthcare products manufacturer with global offices lost £18.5m to CEO fraud last year. A man who purported to be a senior member of staff phoned a female financial controller who was based in one of the company’s Scottish offices and asked her to transfer money to accounts in Hong Kong, China and Tunisia. The financial controller believed the man to genuinely be a senior member of staff and exchanged several calls with him as well as emails. The man convinced her to transfer money into three foreign bank accounts.

In general, Action Fraud says limited companies tend to be the target with 52% of reports coming from this business type, while 22% of reports have come from businesses within London suggesting that this problem is particularly affecting the capital.

Steve Proffitt, deputy head of Action Fraud, said: ‘It is important that all businesses are made aware of this type of fraud. We encourage businesses to educate their staff about this type of fraud in order to prevent themselves from becoming the next victim.

‘Employees should be encouraged to double check everything they do and never be rushed into transferring large amounts of money even if they do think that it’s an important task given to them by their CEO.’