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Criminals turned to online and technology-enabled scams to exploit people’s fears about the Covid-19 pandemic, UK Finance’s latest Fraud the Facts1 report has revealed.
Impersonation scam cases, in which criminals impersonate trusted organisations to trick victims into handing over their money, almost doubled to 39,364 cases in 2020, the largest increase of all scam types. During the pandemic, criminals sent fraudulent emails claiming to offer government support to those impacted by the pandemic and scam text messages requesting payments to book a Covid-19 vaccine. They also impersonated delivery companies to exploit the rise in online shopping.
There was a 32 per cent increase in investment scam cases last year, which are often promoted through adverts on search engines offering higher than average returns, and a 38 per cent increase in cases of romance scams, driven by the rise in online dating during the pandemic.
To capitalise on the increase in online activity during the pandemic, UK Finance has also seen the emergence of criminals openly advertising fraud and scam services for sale online, including template phishing websites and custom-built scam apps which replicate real banking apps.
UK Finance is calling for fraud to be included in the scope of the government’s Online Safety Bill to better protect consumers from these scams. This would ensure that online platforms such as social media firms, search engines and dating websites take action to address vulnerabilities in their systems that are being exploited by criminals to commit fraud.
Katy Worobec, Managing Director of Economic Crime at UK Finance, said:
The banking industry has worked hard throughout the pandemic to protect customers from fraud and to go after the criminals behind it, with over £1.6 billion of fraud stopped in 2020.
“However, we are seeing a worrying rise in online and technology-enabled scams that evade banks’ advanced security systems and use digital platforms to target victims directly, tricking them into giving away their money or information.
“We urge the government to use the upcoming Online Safety Bill to ensure online platforms take action to protect customers by taking down scam adverts on search engines, removing fake profiles on online dating websites and tackling fraudulent content on social media.
“It cannot be right that online firms are effectively profiting from fraud, while society as a whole pays the price.
Authorised Push Payment fraud
Authorised Push Payment (APP) fraud cases, where customers are tricked into authorising a payment to another account controlled by a criminal, increased by 22 per cent to almost 150,000 in 2020. Losses amounted to a total of £479 million, up five per cent on the previous year.
Unauthorised fraud
In an unauthorised fraudulent transaction, the account holder themselves does not give permission for the payment and the transaction is carried out by the criminal. Unauthorised fraud losses fell by five per cent to £783.8 million in 2020. The banking and finance industry prevented £1.6 billion of attempted unauthorised fraud and continue to invest in advanced security systems to detect and prevent fraudulent activity. This means that £6.73 in every £10 of attempted unauthorised fraud was blocked by the industry last year.
Lockdown restrictions have caused criminals to turn away from more traditional forms of fraud.
Working with law enforcement
The banking industry works closely with the police to prevent fraud and catch and prosecute the criminal gangs responsible. In 2020:
Staying safe
UK Finance urges customers to follow the advice of the Take Five to Stop Fraud campaign, and remember that criminals are experts at impersonating people, organisations and the police. They spend hours researching you for their scams, hoping you’ll let your guard down for just a moment. Stop and think. It could protect you and your money.
Protect: Contact your bank immediately if you think you’ve fallen for a scam and report it to Action Fraud.
UK Finance is the collective voice for the banking and finance industry. Representing more than 250 firms across the industry, we act to enhance competitiveness, support customers and facilitate innovation.