In its annual Fraud Report, banking trade body UK Finance revealed unauthorised fraud in the UK hit £730m last year, while authorised push payment (APP) fraud reached £583m.

Almost 40% of APP losses were the result of impersonation scams where the victim unwittingly authorised payment to a scammer who they believed was a legitimate contact.

The report found the public’s “doubts and fears” relating to the pandemic and rising cost of living made criminals’ job easier, with victims tricked into handing over personal details and passwords which were then used to access financial accounts or set up fake ones.

Almost 200,000 people willingly transferred money to fraudsters in 2021, only realising they’d been scammed after the money was gone – a rise of 39% in just 12 months.

“Criminal gangs, well-organised, ruthless and technology-savvy, are not going to be discouraged easily,” the report stated.

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“They are systemically bypassing banks security measures by directing their efforts at the customer outside the payments journey. This highlights how important it is for different sectors to work together to fight fraud. It is an ever growing and persistent threat to businesses, consumers and the economy as a whole.”

Among a dizzying array of different scams seen last year, including romance dupes, fake investment websites and all manner of card fraud, impersonation scams saw people lose the most money at £215m.

This is where criminals pose as organisations such as the NHS, banks and government departments via phone calls, text messages, emails, fake websites and social media posts to trick people into handing over their personal and financial information.

The table below reveals the different type of fraud reported and losses suffered by victims in 2021:

Katy Worobec, managing director of economic crime at UK Finance, said: “Fraud has a devastating impact on victims and the money stolen funds serious organised crime, as well as imposing significant costs on the wider economy.

“Authorised fraud losses rose again this year as criminals targeted people through a variety of sophisticated scams, with much of the criminal activity taking place outside the banking sector, often involving online and technology platforms.”

The Online Safety Bill

She reiterated calls for other sectors, including big tech and telecommunications, to play a greater role in helping protect customers from the scourge of fraud.

Earlier this year and after much lobbying, the Online Safety Bill’s scope was expanded to include advertising on social media and search engines which have been lambasted for advertising scams online without checking their legitimacy.

Worobec said: “Major online platforms – search engines, social media and shopping platforms – are the gateway to almost all online activity and they must provide a barrier to fraud and not a conduit.”

The upcoming Economic Crime and Corporate Transparency Bill, meanwhile, proposes to give new powers to organisations allowing better information sharing to help improve the ability to track stolen money.

The government has also said it will legislate in the upcoming Financial Services and Markets Bill to enable regulatory action by the Payment Systems Regulator on APP fraud, with a consultation on APP reimbursement due later this year.

“These are things we have long called for and will support efforts to work together and stop the fraud happening in the first place,” said Worobec.

Since 2019, the APP voluntary code has been in place, with banks that have signed up to the scheme showing fraud warnings to customers before they transfer money out of their accounts. Although most of the major high street banks adhere to this code, there are some that choose to tackle this sort of fraud differently or not at all.

Common scams

Today’s report showed £172m was lost to investment scams, a rise of 48% in 2021 compared to the year before, while there were 99,733 cases of purchase scams last year, accounting for 51% of all cases.

The number of people falling victim to romance scams shot up by 41%, with more than £30m handed over to fraudsters impersonating a romantic partner in need of financial help last year.

Just over £137m was lost to fraudsters impersonating the police or bank staff, a rise of 51% in 12 months.

Unauthorised financial fraud losses across payment cards, remote banking and cheques fell 7% in 2021, but still totalled £730m in 2021.

Worobec said this type of criminal activity remains a “major problem” despite the banking and finance industry preventing a further £1.4bn of unauthorised fraud from getting into the hands of criminals.

How to avoid being scammed

UK Finance urged 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,” Worobec said.

“Stop and think. It could protect you and your money.”

Stop: Taking a moment to stop and think before parting with your money or information could keep you safe.
Challenge: Could it be fake? It’s ok to reject, refuse or ignore any requests. Only criminals will try to rush or panic you.
Protect: Contact your bank immediately if you think you’ve fallen for a scam and report it to Action Fraud.