By Esmée Hardwick-Slack
At least £500 million has been stolen from UK banking customers in the first half of 2018
UK Finance has reported that £145m of the £500m was lost through authorised push payment (APP) scams, with the rest being lost to unauthorised fraud. Unauthorised fraud victims – meaning the transaction is carried out by a third party and not authorised by the account holder – are often refunded by their banks, however, the same cannot be said for victims of APP fraud, with only £30.9 million of the £145m being returned to customers. The current legislation means the customer is liable for any losses incurred if they authorise a payment themselves.
Purchase scams took up almost two-thirds of reported APP scams in the first six months of the year, with people paying in advance for products and services such as cars or holiday rentals, which were not received or do not exist. This type of fraud usually takes place online, through auction websites or social media. Often these scams persuaded victims to transfer significant amounts of money by claiming to be from the police, bank or other organisations. The average loss in police and bank impersonation fraud amounts to around £11,402.
Managing director of economic crime at UK Finance, Katy Worobec, has said:
“The criminals behind [fraud] target their victims indiscriminately and the proceeds go on to fund terrorism, people smuggling and drug trafficking, whether or not the individual is refunded.”
Ms Worobec has also emphasised that two-thirds of all unauthorised fraud was successfully thwarted by UK financial institutions.
However, Gareth Shaw, money expert at the consumer group Which? Has said the efforts by UK banks has been “woefully insufficient”.
“Banks… have not done enough to protect their customers, who continue to lose life-changing sums of money to ever-more sophisticated crooks. The Payment Systems Regulator has rightly committed to introducing a reimbursement scheme for victims. It’s about time that banks step up and properly compensate customers who have lost money through no fault of their own.”
Protecting yourself against fraud
UK Finance offers the following advice on fraud:
- Never disclose security details, such as your PIN or full banking password
- Don’t assume an email, text or phone call is authentic
- Don’t be rushed – a genuine organisation won’t mind waiting
- Listen to your instincts – you know if something doesn’t feel right
- Stay in control – don’t panic and make a decision you’ll regret
- If in doubt, always call your bank using an official number on their website or on official correspondence
What steps do you take to protect yourself from fraud? Have your say in the comment section or join the conversation on our Twitter.