Banks’ rip-off alerts begin to flip tide on ‘authorised’ fraud

Criminals stole £571.7million in the first half of 2024, new figures from UK Finance reveal. 

While still a staggering figure, it marks a 1.5 per cent drop in the amount of money lost to criminals compared to the first half of 2023.

It was pushed down by a dip in authorised fraud – also known as Authorised Push Payments or APP fraud – which saw the first drop in cases since the second half of 2021. 

APP fraud happens when someone is tricked into paying money into a scammer’s account, or handing over a password. 

In other words, they take some kind of action or volunteer information which makes the fraud possible. 

While the amount of money stolen by fraudsters overall fell in the first six months of the year, the number of cases unfortunately rose by 16 per cent to 1.6million.

Is the tide turning on Authorised Push Payments? 

UK Finance divides fraud into two categories – authorised and unauthorised (more on this below).

APP fraud dropped compared to the first half of 2023, both in cases and the amount of money stolen. This pushed the overall fraud loss figure for the first half of 2024 down. 

Criminals pilfered £213.7million from Britons in this way, down 11 per cent compared with the first half of last year.

The dip in APP fraud was helped by banks, which have been going to greater lengths to warn customers when they spot an uptick in a particular type of scam – including AI voice imitation scams and CEO scams. 

Banks prevented £710.9million of unauthorised fraud through advanced security systems, according to UK Finance.  

The total number of APP cases was down 16 per cent to 97,344, with falls in case numbers across all categories of APP fraud, UK Finance reported. 

The volume of APP cases had been on an upward trend since the second half of 2021 when there were 94,456 cases of APP fraud recorded. They rose year on year since then and this is the first time they have dropped since. 

The number of purchase scams, where a victim pays in advance for goods or services that are never received, fell by 11 per cent. 

The number of romance scams, where victims are tricked into believing they are in a relationship, fell by seven per cent and investment scams also decreased in cases by 29 per cent.

A total of £14.5million was lost to romance scams during January to June 2024, a decrease of 21 per cent when compared with the same period in 2023. 

The number of fraud cases where criminals impersonate a bank or the police and convince someone to transfer money fell by 32 per cent and the amount lost to this type of fraud fell by 26 per cent.

A total of £18.8million was lost to this type of scam during the first six months of 2024, a decrease of 42 per cent when compared with 2023. 

‘It’s encouraging to see declines in certain fraud categories, in particular APP, thanks in most part to strong investment by banks along with industry collaboration and education programmes,’ said Dan Holmes, director of banking fraud, identity and market strategy at the fraud detection company Feedzai. 

Unauthorised fraud losses still rage 

Unauthorised fraud – where victims are not directly involved, for example purchases made with stolen credit card details – rose in the first half of 2024 both in case numbers and the amount lost. 

Losses due to unauthorised transactions across payment cards, remote banking and cheques were £358million in the first half of this year, jumping five per cent from the first half of 2023. 

The total number of cases was just over 1.5million, a rise of 19 per cent on the same period last year.

UK Finance said one of the main reasons for the rise in payment card fraud losses was a 26 per cent increase in ‘card not present’ cases. This takes place when a transaction is made over the phone or online using stolen card details. 

Criminals are able to purchase millions of stolen credit card details on the dark web to use for purchases and to sell to other criminals in bundles. 

There has also been a spike in criminals stealing mobile phones in order to get access to their victims’ banking apps and take money.  

Victims of unauthorised fraud cases such as these are legally protected against losses, and customers are fully refunded in more than 98 per cent of these fraud cases, according to UK Finance. 

On 7 October 2024, rules introduced by the Payment Systems Regulator were passed into law forcing banks compensate APP fraud victims up to £85,000 within five days, after the original £415,000 limit was watered down.

Ben Donaldson, managing director of economic crime at UK Finance said: ‘While reimbursement is important in the fight against fraud, it can only be part of the solution. 

‘On its own it does nothing to prevent or reduce the psychological harms to victims, nor does it prevent organised crime groups from stealing money.’

Responding to the data, Nicola Bannister, customer support director at TSB, said: ‘While banks are helping to reduce fraud losses, with a notable reduction in push payment fraud – far too many consumers are still dealing with the devastating impact of scams that stem from online companies and telephone firms.’

Stephen White, chief operating officer at Santander UK said: ‘With more than 70 per cent of APP scams originating on online platforms and 16 per cent through telecommunications networks, we must concentrate our efforts on protecting consumers, and to do that, we desperately need cross-industry collaboration – including banks, tech companies, telecoms and government – to create meaningful change.’