Authorised and unauthorised fraud totalled £503.4m in the first six months of 2018, with authorised push payment (APP) scams on the increase, according to data from UK Finance
During the same period, the finance industry prevented £705.7m of unauthorised fraud, equivalent to £2 in every £3 of attempted unauthorised fraud.
UK Finance says intelligence indicates that social engineering, in which criminals groom and manipulate people into divulging personal or financial details or transferring money, was the key driver of both unauthorised and authorised fraud losses in the first half of 2018.
A total of £145.4m was lost due to APP scams, where the account holder is duped into authorising a payment to be made to another account, split between personal (£92.9m) and non-personal or business (£52.5m) accounts.
In total there were 34,128 cases of APP scams, split between personal (31,510 cases) and non-personal (2,618 cases) accounts. Financial providers were able to return a total of £30.9m of the losses.
Purchase scams were the most prevalent APP scam accounting for almost two thirds (63%) of reported APP cases with a total of £19.4m. In these scams the victim pays in advance for a product or service, such as a car, electronics or a holiday rental, which is never received or does not exist. It often takes place online, through auction websites or social media.
There was a total of 3,866 reported cases of impersonation scams, where the criminal purports to be from the police, bank and other organisations and tricks the victim into transferring money, often claiming there has been fraud on the account. The average loss from a police and bank impersonation scam is £11,402, and in other impersonation scams £7,504.
While CEO fraud involving impersonation of the CEO to authorise a fraudulent transaction had the least number of cases, it resulted in the highest average case value of £23,055.
However, the unauthorised fraud data on payment cards, remote banking and cheques for January to June 2018 shows combined total losses decreased by 2% year-on-year to £358m.
Losses due to unauthorised transactions on payment cards fell 2% year-on-year to £281.2m, while losses due to unauthorised remote banking fraud totalled £73.6m, flat compared to 2017.
Cheque fraud losses fell 41% to £3.2m, the lowest half-year total on record.
There were 1,036,376 reported cases of unauthorised financial fraud, a rise of 10% compared to the year before.
Report by Pat Sweet
