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Highlights
- In H1 2021, scammers stole around £753.9 million (US $1.03 billion), up by 30% as compared with H1 2020.
- For the first time, the losses in authorised push payment (APP) fraud stood at £355.3 million.
- According to survey, around 32% people struggle to afford basic needs like food for their family if they lost less than £500 to scammers.
A surge in online frauds since pandemic started has become a national security threat as the UK banks reported a 71% rise in authorised fraud and asked for government action. The scammers influence customers to transfer money or provide sensitive personal details.
According to a UK Financial report, scammers are continuously looking for new ways to target potential victims and in the first half of 2021 they stole around £753.9 million (US $1.03 billion), up by 30% as compared with H1 2020. However, banks prevented a whopping £736 million from being stolen by using advanced security systems.
For the first time the losses in authorised push payment (APP) fraud stood at £355.3 million, which have exceed unauthorised fraud of £398.6 million, up by 7% as compared to same period of last year.
Scammers trick customers using tactics such as text messages, emails, phone calls, fake website, and social media post into handing over sensitive personal details and passwords.
Source: Copyright © 2021 Kalkine Media
Around 70% of the Authorised Push Payment (APP) scams originated from online platforms and increasing social media adverts are targeting victims as young as 14 years to become money mules for illicit funds.
Losses from Impersonation scams were £129.3 million, up by 123% where scammers send fake messages and emails posing as delivery companies, Government departments and the NHS. Loses from investment scams were £107.7 million, up by 95% and Romance scam losses were reported at £15.1 million, up by 62%.
Also read: How can you recover your money after fraud?
The crisis
According to the recent survey conducted by TSB involving 2,000 people, around 32% people would struggle to afford food for their family if they lost less than £500 to scammer and figure increased to 50% for the loss of £1,000, due to making an honest mistake.
Further, it found that 74% people would support their banks offering guaranteed reimbursement as many banks have signed a voluntary reimbursement code to help fraud victims to recover their money. Some banks are also expecting their customers to have detailed knowledge about various scams.
Other financial institutes and banks have also launched their helplines to make it easier for their customers to report scam and fraud.
Over 28% of people reported that their mental health would be affected if they lost their money to scammers. In the past 12 month, around 32% of people, between 18 and 34 years, are most likely to be a victim or know someone who has been scammed as compared to 18% of people between 35 and 54 years, and 13% of over 55 years.
Also read: Why UK government should introduce stringent law to counter frauds
Since April 2019, banks have refunded 98% of all bank fraud cases as compared to 42% of funds stolen being returned to the victim across the industry, rising to 495 under the guaranteed reimbursement code.
Around 72% people want their banks to be more transparent about their performance on the issue of fraud refunds.
Trade association UK finance reported that scammers are exploiting weaknesses, which are not in control of the financial institutes. Also coordinated action including other industry is needed to be addresses which now been represented as national security threat.
Also read: Online Scams: UK consumers clueless on how to avert frauds
