UK fraud losses from authorised push payments (APP) reach £249.1m

By Puja Sharma

This report shows that while the end of the pandemic has seen a fall in overall fraud losses, some fraud types have increased as criminals continue to adapt their methods.

The UK Finance has released its latest fraud report covering the first half of 2022. The organisation noted that the drop was partially due to H1 21 being an exceptionally high period for fraud, rather than the start of a downward trend.

A total of over £609.8 million was stolen through fraud and scams in the first half of 2022, a decline of 13% compared to H1 2021. Of this total, unauthorised fraud losses were £360.8 million, and authorised push payment (APP) fraud losses were £249.1 million. The banking and finance industry prevented a further £583.9 million of unauthorised fraud from getting into the hands of criminals.

Given that much of the fraud is initiated from criminal activity taking place through online and technology platforms, UK Finance and its members have long been calling for greater cross-sector action to tackle the problem at the source and will continue working with the government on upcoming legislation in this area.

Colum Lyons, CEO and founder of ID-Pal on the fraud report, said, “When it comes to fraud, financial service providers need to adopt the mindset of ‘not if, but when and this morning’s numbers confirm this. The reduction in instances of fraud in the same period last year is positive to see. Solutions that simplify fraud prevention so businesses of any size can benefit from them have led to the increasing adoption of anti-fraud technology across more industries.

“Fraud is an ever-present threat to both organisations and individuals and action needs to be taken to protect both from this risk. Identifying fraudsters before they can cause harm is central to this and having robust digital ID&V processes in place that can prevent fraud at source is key.”

Authorised push payment (APP) fraud: here the customer is tricked into authorising a payment to an account controlled by a criminal.

In H1 2022, APP fraud losses continued to be driven by the abuse of online platforms used by criminals to scam their victims. These include investment scams advertised on search engines and social media. Criminals used scam phone calls, text messages, and emails, as well as fake websites and social media posts, to trick people into handing over personal details and passwords. They subsequently used this information to convince people into authorising a payment.

There were 95,219 incidents of APP scams in H1 2022 with gross losses of £249.1 million, down 17% compared to H1 2021. This total includes:

Around £90.5 million was lost to impersonation scams (impersonation: police/bank staff and impersonation: other), whereby criminals impersonate a range of organisations to trick people into giving away their personal and financial information. This was the largest category of APP losses. Over £61.2 million was lost to investment scams, the second largest category of APP losses. Around 53,782 cases of purchase scams, which means this was the most common type of scam – accounting for 56% of all cases. While the overall decrease in APP fraud, the amount returned to customers has increased, rising by 11% to £140.1 million in the first half of 2022.

UK Finance also collects data on cases assessed under the APP voluntary code. As a subset of the total amount refunded above, £117.2 million of losses were returned to victims under the APP code, accounting for 60% of losses in these cases.

Unauthorised fraud: here the account holder themselves does not provide authorisation and the transaction is carried out by a criminal (for example, the victim’s card details are used without their knowledge or consent).

Unauthorised financial fraud losses across payment cards, remote banking, and cheques totalled £360.8 million in H1 2022, a decrease of 9% compared to H1 2021.  Victims of unauthorised payment card fraud are legally protected against losses.

Key highlights

• Over £609.8 million was stolen by criminals through authorised and unauthorised fraud in H1 2022, down 13% compared to the same period in 2021
• UK Finance reiterates calls for cross-sector action to target the criminals responsible
• A total of over £609.8 million was stolen through fraud and scams in the first half of 2022, a decline of 13% compared to H1 2021.
• APP fraud losses continued to be driven by the abuse of online platforms used by criminals to scam their victims.
• Over £61.2 million was lost to investment scams, the second largest category of APP losses.