UK victims lose $1.5b to fraudsters

Fraud became the most common crime in the United Kingdom in 2022, with new research from trade association UK Finance suggesting one person in 15 fell victim to a scam, and as the population was collectively cheated out of 1.2 billion pounds ($1.51 billion).

UK Finance, which represents more than 300 companies in the banking, credit, markets, and payment sectors, said in its Annual Fraud Report around 3 million scams were perpetrated in 2022, which was down by around 4 percent on the 2021 total. Most of the frauds involved payment cards.

UK Finance said the banking and finance industry prevented an additional 1.2 billion pounds of frauds from succeeding.

David Postings, the chief executive of UK Finance, said most of the frauds committed in the UK in 2022 involved drug gangs, overseas criminal groups, and "state-sponsored bad actors". His report said romance fraud, in which fraudsters pretend to be romantically interested in a victim, became more common in 2022.

"The banking and finance sector is at the forefront of efforts to tackle this criminal activity," Postings said. "The sector spends billions on detection and prevention and also refunds people who have fallen victim, even if the fraud originated outside the banking system."

Postings said that, while banks are legally obligated to refund money people lose through "unauthorized" frauds — in which victims do not agree to part with their money — they are not compelled to reimburse "authorized" scams, in which victims are tricked into willingly handing over money. Consequently, with refunds in those cases made on a voluntary basis, banks only refunded about 59 percent of people's losses, which amounted to nearly 286 million pounds.

The UK government has recently released a new anti-fraud strategy, which includes a provision for banks to hold on to money involved in transactions for longer; to allow time for more checks to be carried out. The UK is also in the process of banning cold calls for financial products. Additionally, the Payment Systems Regulator is considering requiring banks and building societies to reimburse all victims of individual authorized push payment scams that involve more than 100 pounds.

Postings said UK Finance's research "makes clear just how much fraud emanates from online platforms and through telecommunications".

"The government's new fraud strategy rightly says we need to focus on stopping it at source and that these other sectors need to do far more to tackle the problem they are facilitating," he said, referring to technology companies' need to play a greater role in not only stopping online frauds but in reimbursing lost funds.

However, the BBC quoted industry group Tech UK as saying online companies "already take a wide range of active measures to prevent fraud".