Fraud remains a significant concern, with criminals stealing £1.2 billion in 2023. The consequences of this damaging crime have widespread effects on individuals and society overall. While financial institutions are at the forefront of combatting fraudulent activities, forthcoming changes in reimbursement regulations highlight the need for proactive measures in the technology and telecommunications sectors to prevent fraud on their platforms and networks.
The 2024 annual fraud report released by UK Finance revealed that unauthorised fraud losses from payment cards, remote banking, and cheques totalled £708.7 million in 2023, marking a three per cent decrease from the previous year. Despite a two per cent decrease in recorded cases, the challenge remains significant.
An encouraging outcome from the report was the nine per cent decrease in remote purchase losses, which has steadily declined for five years. This reduction is attributed to the implementation of Strong Customer Authentication (SCA), which authenticates customer identities and consequently reduces fraudulent activities in this area. However, card ID theft saw a worrying increase of 53 per cent, resulting in £79.1 million in losses in 2023.
The report also highlighted a concerning trend of Authorised Push Payment (APP) fraud cases, which totalled 232,429 in 2023, reflecting a 12 per cent increase from the previous year. This type of fraud encompasses purchase scams, where victims are deceived into making payments for non-existent goods, as well as romance scams, where individuals are deceived into believing they are in a relationship.
Furthermore, the report exposed the role of online platforms and telecommunications in perpetuating fraudulent activities. Criminals exploit these channels to manipulate victims, gathering personal information to commit APP fraud. With a focus on impersonation tactics, these criminals further attempt to access existing accounts or apply for credit cards in the victim’s name.
Recognising the gravity of this issue, Pedro Barata, Chief Product Officer at Feedzai, emphasised the necessity for effective collaboration across the industry to protect consumers from the detrimental effects of fraud. Collaborations could include utilizing behavioural biometrics and transactional data analysis to prevent fraud with minimal user disruption.
The data reported by UK Finance underscores the need for increased vigilance and awareness on the part of consumers. The Take Five to Stop Fraud campaign advises individuals to remain cautious and sceptical, as criminals often use impersonation tactics and meticulously research victims in preparation for their scams.
The 2024 Fraud Report offers a comprehensive breakdown of fraud figures, providing insights into the impact of various types of fraud, both in terms of the total losses incurred and the number of reported cases. It provides a deeper understanding of the scale of the issue and the necessity for continued efforts to combat fraudulent activities.
In light of these findings, it is evident that addressing fraud requires a collective effort involving regulatory bodies, financial institutions, and the technology industry. By understanding the patterns and tactics employed by fraudsters, we can work towards implementing more robust and effective measures to combat this pervasive threat.