Scams in which victims are duped into handing over money or sensitive information have leapt 70 per cent

1. 23/9/21, 6:40 PM
Sharp jump in UK fraud cases sparks warning of ‘national security threat’ | Financial Times
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Sharp jump in UK fraud cases
sparks warning of ‘national security
threat’
Scams in which victims are duped into handing over
money or sensitive information have leapt 70 per
cent
yesterday
Losses from ‘authorised’ fraud rose to £355.5m in the first six months of 2021 — up 71 per cent on the same
period in 2020 © Sirinarth Mekvorawuth/Dreamstime
UK banks have warned that fraud now represents a “national security
threat”
, as they reported a 71 per cent jump in “authorised” fraud, in which
victims are duped into transferring their money to criminals or handing
over sensitive personal details.
Authorised fraud losses rose to £355.5m in the first six months of 2021 —

2. 23/9/21, 6:40 PM
Sharp jump in UK fraud cases sparks warning of ‘national security threat’ | Financial Times
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up 71 per cent on the same period in 2020 — with victims numbering
106,000.
It is the first time that losses in this category of fraud have exceeded
unauthorised theft via card payments — previously the dominant source of
losses, according to UK Finance, which collates the figures from banks.
The industry body said the figures showed how criminals were shifting
their focus outside the banking system in trying to part victims from their
cash. It called for co-ordinated action from the finance industry,
government and other sectors such as online search and social media
companies to stem the tide of organised fraud and protect consumers.
Katy Worobec, managing director of economic crime at UK Finance, said:
“The banking and finance industry invests billions in advanced systems to
try to stop fraud happening in the first place, but criminals are exploiting
weaknesses outside banks’ control to trick customers into making
payments directly to them.
“This is why we are calling for co-ordinated action and increased efforts
from government and other sectors to tackle what is now a national
security threat.”
Impersonation scams were up 123 per cent, with losses of £129.3m. In
these frauds, criminals send out fake texts and emails posing as delivery
companies, the NHS or government departments.
Investment scams were also up sharply, nearly doubling to £107.7m. As
interest in cryptocurrencies and “meme” stocks promoted on social media
has soared, regulators have warned investors of falling for advertisements
on websites or apps offering high returns.
UK Finance said losses from romance scams had risen 62 per cent to
£15.1m, linking the rise to the growth of online dating in the pandemic.

3. 23/9/21, 6:40 PM
Sharp jump in UK fraud cases sparks warning of ‘national security threat’ | Financial Times
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Another pandemic-fuelled trend was the dominance of purchase scams,
in which people pay online for goods that do not arrive. Purchase scams
accounted for almost half of all “authorised push payment” cases.
Including unauthorised fraud, £753.9m was stolen in the first six months
of 2021, an increase of 30 per cent compared with the first six months of
2020. “It’s another pandemic of its own kind,” Worobec said.
Criminals were increasingly exploiting cryptocurrencies to move money
out of the banking system quickly, Worobec said. Some 70 to 80 per cent
of mobile phones retrieved from criminals caught by police contained
cryptocurrency wallets, used to “cash out” victims’ funds from their
accounts or transfer funds between fraudsters.
UK Finance said the industry had prevented £736.1m of unauthorised
fraud over the period — £6.49 in every £10 — using high-tech measures
such as behavioural biometric detection on devices and real-time analysis
of transactions.
Compensation remains a bone of contention, however, as victims in fewer
than half of cases of authorised fraud receive any money back, in spite of
most banks having signed up to a voluntary code to refund “no fault”
victims in 2018. MPs and consumer groups have pointed to the disparity
between these banks over refunds, as reimbursement rates vary from
between 30 and 75 per cent of cases, depending on the bank.
Jenny Ross, money editor at consumer group Which?, said: “Most of the
money lost by bank transfer scam victims is still not being reimbursed.
This shameful situation raises serious questions about the payment
regulator’s response and the behaviour of banks that all too often wrongly
try to pin the blame on their customers.
“The regulator must introduce mandatory and more robust reimbursement
requirements for all payment providers, to ensure that customers are

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Sharp jump in UK fraud cases sparks warning of ‘national security threat’ | Financial Times
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treated fairly and consistently when they fall victim to a bank transfer
scam. It must work quickly with the government to get the powers it needs
to deliver this.”
Addressing the question of reimbursement rates, Ms Worobec said:
“Criminals are getting away with this money and we are not able to stop
them. That’s the nub of the matter. We need to fight these types of fraud
through collaboration with other sectors. I want to improve the
reimbursement rates certainly but not at the expense of fighting the
crime.”
Technology companies have donated $1m in advertising space to promote
the banking industry’s Take Five to Stop Fraud campaign, but Ms Worobec
also said online and social media companies that take money from
fraudsters to promote their scam advertisements should put those
revenues towards the Take Five campaign and other ways to combat
fraud.