Authorised payments fraud increase by 22% 

25th October 2023

New figures from UK Finance show that the number of authorised push payments (APP) fraud cases increased by 22% year-on-year to 116,324 in the six months to the end of June, as a result of an increasing number of consumers being conned into fake purchases online.

Figures also show the volume of these purchase scams increased by 43% to almost 77,000 cases, with the total amount lost to this type of fraud rising by 31% to £40.9m The internet drove most APP scams, with 77% of these fraud cases starting online, UK Finance said. A further 17% of APP scams originated from phone calls and text messages.

The report also found criminals stole £580 million through unauthorised and authorised fraud in the first half of 2023, a two per cent decrease compared with the same period in 2022.

Banks prevented a further £651 million of unauthorised fraud from being stolen through advanced security systems. 77 per cent of APP fraud started online and another 17 per cent started through telecommunications networks.

Emma Lovell, CEO of the Lending Standards Board said “These figures show that fraud levels remain worryingly high, indicating fraudsters still pose a significant threat to society and are becoming more sophisticated by the day. With criminals increasingly leaning on social media and online platforms to drain victims’ bank accounts, all sectors  must double down on efforts to protect customers.”

“As well as the financial repercussions, scam victims often suffer devastating emotional distress – feelings that cannot be expunged through reimbursement. While reimbursement is part of the picture, we mustn’t lose focus on the preventative measures that avoid the negative impact on customers – while halting the funding of these criminal enterprises.”

“The Contingent Reimbursement Model Code (CRM Code) exists to ensure signatory firms safeguard their customers with procedures to detect, prevent, and respond to APP scams. Prioritising prevention and detection in the battle against APP fraud has never been more pressing.”

“The industry should rally behind the need to retain the safeguards delivered by the CRM Code beyond reimbursement alone. Upholding an industry code will ensure that firms maintain their commitment to the consistent implementation of measures to prevent fraudulent activities at the forefront. A collaborative approach, from understanding the scale of the issue to maintaining a united front against fraud, is pivotal to our collective efforts in tackling this scourge on society.”

Martin Cheek, Managing Director of SmartSearch said  “The latest UK Finance half-year fraud report reveals eye-watering yet insightful figures. While it is encouraging to see a six per cent decrease in fraud losses, amounting to £580 million in the first half of 2023, regulated firms cannot afford to get complacent.”

“The report highlights the effectiveness of advanced security systems that have prevented an additional £651 million in unauthorised fraud. This is a testament to the financial services sector’s ongoing efforts to protect its customers – but it is clear that there is more work to be done.”

“The staggering 77 per cent of Authorised Push Payment (APP) fraud originating online, with another 17 per cent through telecommunications, underscores an urgent need for robust digital counter measures. The digital landscape is a nefarious and fertile ground for criminal gangs, and firms must be vigilant in safeguarding their reputations.”

“As the report correctly points out, the financial services sector is at the forefront of anti-fraud efforts, with established collaborations with other sectors, the government, and law enforcement. That said, the fight against these criminal gangs is a collective responsibility that extends to all regulated firms.

“Technology is playing an increasingly vital role in preventing these crimes and the money laundering that is an inevitable consequence of them.”