According to UK Finance’s latest ‘Fraud the Facts’ report, total fraud losses in the UK in 2021 reached a staggering £1.31 billion.
Fraud has been a growing problem for years, but it’s been exacerbated by the 2020 pandemic, as scammers have quickly developed their tactics to take advantage of everyone working remotely and socializing online. They also ruthlessly exploited people’s fear and insecurities around Covid-19.
On top of that, scammers are now also using the cost of living crisis to their advantage by exploiting rising costs.
Total fraud losses in the UK 2016 – 2022
2016 – £768.8m
2018 – £844.8m
2020 (start of pandemic) – £1.26 billion
2021 – £1.31 billion
What are the worst types of fraud in the UK?
In 2021, £524.5m was lost to unauthorized debit and credit card fraud. This includes the following types of fraud:
Remote purchase fraud – 79%
Lost and stolen cards – 15%
Card Identity Theft – 5%
Counterfeit cards – less than 1%
Card not received – less than 1%
• Remote purchase/card not present fraud – £412.5m total loss
This is when a criminal uses the details of a stolen card to purchase items over the internet, over the phone or by mail order.
• Lost and stolen cards: £77.2 million in total losses
This is when a criminal uses a lost or stolen card to make purchases in-store, online or to withdraw cash from an ATM or bank branch.
• Card identity theft – £26.3m total loss
This is when a criminal uses the details of a stolen card, along with someone’s personal information, to open an account in that person’s name.
• Counterfeit cards: £4.7m total loss
It is when a criminal creates a fake card using the details obtained from the magnetic stripe of someone’s card.
• Card not received fraud – total losses £3.9m
It’s when a card is stolen in transit – so between the card issuer who sends the card and the customer who receives it. It is then used to make fraudulent purchases, payments or cash withdrawals.
APP scams – what are they and why are they so dangerous?
In 2021, 44% of overall total losses resulted from authorized push payment (APP) scams. In monetary terms, this amounts to £583.2 million.
An Authorized Push Payment (APP) scam occurs when a fraudster has successfully tricked someone into sending them money via wire transfer. They do this because there are fewer protections in place for bank transfers than for debit and credit card payments.
APP scams make up such a large portion of total fraud losses because they involve all scams where they pose as a real business or individual in an effort to trick people into sending them money through bank transfer. Some of the types of scams included are:
• Investment and retirement scams
• Romance scams
• Invoice fraud
• Sell counterfeit products and services
• Delivery scams
• Charity scams
• Lottery scams
• HMRC scams
Since May 2019, it is easier for victims to get their money back after falling for an APP scam due to the “Voluntary APP Scam Code” that has been implemented. The vast majority of banks have signed up to this code to commit to their customers for compensation where the customer has met the standards expected of them under the code.
Since 2019, 47% of claims assessed since the implementation of the code have been reimbursed to victims.
However, just because banks are now doing more to repay victims doesn’t mean these scams should be treated as less threatening. The number of cases is constantly increasing year by year and no one can do anything to stop them.
While a 47% refund rate is a big step in the right direction, it still only gives you a 50/50 chance of getting your money back. Not to mention the time and effort it takes, and the emotional stress it could cause you.
Why is fraud awareness the answer?
It’s unfortunate to say, but nothing can be done to stop scammers from doing what they do. Although there are scammers operating in the UK, a large number of phishing emails and cold calls originate from other countries, which means they are almost untraceable and very difficult to prosecute.
Also, as we move more and more processes online, people become more vulnerable to scammers as we transfer more personal information and spend more time on the Internet.
Scammers send and perform millions of phishing emails and cold calls every day, making them impossible to avoid. The only real way to avoid falling victim to these scams is simply to know the tactics the scammers use, the contact methods they use, and what to do when you are targeted.
Scammers also regularly update and develop their tactics to make their scams more difficult to detect, so it is important to regularly keep up to date with the latest techniques.
KIS Finance infographic –
Fraud in the UK is at an all-time high, so it’s more important than ever that consumers know how to protect themselves.
This infographic is a simple guide that consumers can use to remind them of the most important things to watch out for to protect themselves against fraud.
With the thousands upon thousands of different methods scammers are now using, it can be easy to get caught up and forget the basics. People can use this guide to refer to whenever they need a reminder of the most common things to watch out for.
Infographic at the bottom of the page: https://www.kisbridgingloans.co.uk/guide-to-fraud-prevention…
Notes to Journalists/Editors:
If you wish to use these commentaries and infographics, a link to KIS Finance is required to credit the source.
KIS Finance Fraud Guides – https://www.kisbridgingloans.co.uk/guide-to-fraud-prevention…
About KIS Finance:
KIS Finance is an independent finance broker specializing in bridge finance, development finance, commercial mortgages, equity release and secured loans. Their team of advisors has considerable experience in several different areas of the financial industry, as well as in insurance and compliance.
KIS Finance is also very invested as a company in raising awareness and preventing fraud and protecting its customers against financial fraud and scams.