A proliferation of digital scams drove a 12% year-on-year (YoY) improve in licensed push fee (APP) fraud circumstances within the UK final 12 months, with the figures prone to develop additional in 2024, in line with consultants.
The headline figures come from the Annual Fraud Report 2024, revealed at the moment by banking foyer group UK Finance.
APP fraud has been on the rise for a while. It refers to incidents the place a scammer posing as a trusted entity tips the sufferer into transferring cash to a checking account underneath their management. UK Finance stated three-quarters (76%) of circumstances final 12 months stemmed from on-line sources and 16% from telecoms.
The principle contributor to APP fraud in 2023 was buy scams, which happen when a sufferer buys an merchandise on-line that by no means materializes. The full variety of these circumstances rose 34% yearly to over 156,000, with losses surging 28% to £86m. Buy scams account for 67% of the entire variety of APP circumstances.
Like buy scams, romance fraud additionally hit an all-time excessive in 2023 – by way of quantity and worth. Losses elevated 17% YoY to £37m and circumstances elevated 14%.
Learn extra on UK fraud: Buy Scams Surge as Fraud Losses Hit £580m
“Over the previous 12 months, banks have seen a continued uptick in modern digital techniques utilized by fraudsters. AI, particularly, is beginning to make it more durable for shoppers to establish when fraud is going on,” defined Ignatius Adjei, UK monetary companies head of anti-fraud companies at KPMG UK.
“For instance, AI-generated pictures and deep faux video expertise are getting used as a part of romance and ‘get wealthy fast’ funding scams to influence folks to half with their cash.”
Funding fraud circumstances, one other contributor to APP fraud, elevated 1% to 10,226 over the interval.
The place fraudsters couldn’t socially engineer victims through APP fraud, they usually used stolen private and card-related info to hijack accounts and/or apply for brand spanking new credit score strains, UK Finance claimed.
Losses from card ID theft elevated 53% YoY to £79m.
APP Fraud Instances Set to Rise Additional
A change within the Fee Providers Rules in October 2024 means banks will probably be liable to reimburse victims of APP fraud so long as the fee is made through Quicker Funds and despatched to a UK banking supplier, in line with Joel Seager, a disputes associate at regulation agency Fladgate.
KPMG UK’s Adjei claimed this may have an effect on reported circumstances going ahead.
“Whether or not or not the precise variety of crimes dedicated modifications, there’ll in all probability be a rise in reported fraud over the approaching 12 months,” he famous. “This is because of new APP fraud reimbursement guidelines by the Funds Programs Regulator, encouraging extra victims to report, as presently, in line with the Nationwide Crime Company, 86% of fraud goes undocumented.”
Nevertheless, regardless of the headline figures, APP fraud losses really fell in 2023, by 5% to £460m.
UK Finance claimed total losses from licensed and unauthorized fraud additionally fell, by 4% YoY, to £1.2bn in 2023.