Last week UK Finance published their annual fraud report, providing an overview of payment industry fraud. In the week that the worldwide response to the Covid-19 crisis escalated significantly, you are likely to have missed it, but, unfortunately, being alert to fraud has never been more relevant.
The report highlights the large level, and wide ranging methods, of fraud in the financial services industry and the increasingly more sophisticated, as well as morally reprehensible, steps unscrupulous fraudsters are prepared to take.
A step in the right direction
The positive from the report is that, in 2019, there was a small 2% drop, from 2018, in the total amount of unauthorised financial fraud to £824.8M. In addition, banks and card companies are estimated to have prevented around £1.8 billion in unauthorised frauds, the equivalent of approximately 2/3’s the value of all frauds being stopped.
However, reported incidents of authorised push payments (APP) frauds increased significantly with over 122,000 cases and a total value of £455.8M, representing an annual increase of 45% by number, and 29% by value. This increase in recorded cases may be partly attributable to the APP voluntary code to which some banks have committed, which accounts for over 50,000 of the reported cases and a value of £101.1M. Under the code, in place since May 2019 and included in these statistics for the first time, £41.3M was reimbursed to customers.
Exploiting the vulnerable
Recent events have also reminded us that fraudsters look for the most vulnerable in our society, and seek to strike when they are then at their most vulnerable. The UK Finance report highlights the use of online scams and impersonation by fraudsters driving the increase in APP frauds.
In the last week alone, we have seen various examples of fraudsters seeking to exploit the current crisis. Emails purporting to be from the World Health Organisation, and the US’s Centre for Chronic Diseases, with links purporting to provide information about Covid-19, have compromised IT systems; emails apparently from schools seeking bank details of those entitled to free school meals (purporting to assist with funding); and fraudsters posing as banks providing new account details for funds to be paid into as a result of the crisis. There will be more to come, such as fraudsters posing as safe havens for investments during troubled times, or as government authorities offering funding and tax reliefs.
The advice to be wary against fraud is ever present but, sadly, is even more important in times of crisis or vulnerability. If it sounds too good to be true, it probably is. Don’t respond to unsolicited emails, or click on a link sent from an unknown source. Never give out bank details without appropriate verification. Remember all the tips from the UK Finance “Take Five” campaign.
Be careful out there.