Fraud remains a major problem as over £1 billion is stolen by criminals in 2023

Losses due to unauthorised transactions across payment cards, remote banking and cheques were £708.7 million this year, down 3% compared to 2022. The total number of recorded cases was 2.7 million, down 2%.

One of the main contributors to the overall fall in payment card fraud losses was a 9% fall in remote purchase losses, the fifth consecutive year of declines in this fraud space. The roll-out of Strong Customer Authentication (SCA) over the past two years has helped to reduce this type of fraud by verifying customer’s identity.

Card ID theft increased again this year, with losses up 53% to £79.1 million. Where criminals are unable to socially engineer their victims into making authorised push payments, they use the personal information gathered as well as stolen card details to either take over existing accounts or apply for new credit cards.

There was a 7% increase in the amount of unauthorised fraud prevented, to £1.25 billion.

Victims of unauthorised fraud cases such as these are legally protected against losses. And UK Finance research indicates that customers are fully refunded in more than 98% of unauthorised fraud cases.

Authorised Push Payment fraud losses

Authorised push payment (APP) fraud losses were £459.7million, down 5% compared to last year. This comprised £376.4million of personal losses and £83.3million of business losses.

The total number of APP cases was up 12% to 232,429. The main driver behind this is purchase scams, where people are tricked into paying for goods that never materialise. The total number of these cases rose 34% to over 156,000, while the amount lost rose 28% to £85.9 million making it the highest loss and case total ever recorded. Purchase scams account for 67% of the total number of APP cases.

The number of romance scams, where victims are tricked into believing they are in a relationship, also reached its highest highs in terms of losses and cases, which were up by 17% (to £36.5million) and 14% respectively.

The number of fraud cases where criminals impersonate a bank or the police and convince someone to transfer money to a “safe account” fell by 37% and the amount lost to this type of fraud fell by 28%. There has been significant investment made in warning consumers that a bank will never ask someone to transfer money in this way.

In total £287.3 million of APP losses was returned to victims in 2023 or 62% of the total loss. This has increased from 59% in 2022.

Authorised Push Payment enablers

Authorised Push Payment (APP) fraud losses continued to be driven by the abuse of online platforms and telecommunications. Not only do criminals take advantage of these platforms to encourage the transfer of money through investment, romance or purchase scams but criminals also use scam phone calls, text messages and emails to trick people into handing over personal details and passwords.

Typically, criminals first focus their attempts on socially engineering personal information from their victims with a view to committing APP fraud in which the victim makes the payment themselves. If this is not successful, the criminal often has enough personal information to enable them instead to impersonate their victims, with a view to either taking control of their existing accounts or applying for credit cards in their name.

UK Finance data on the sources of APP fraud shows:

• 76% of APP fraud cases originated from online sources. These cases tend to be lower-value scams, such as purchase scams, and so account for 30% of total losses.
• 16% of cases originated in telecommunications and these tend to include higher value cases, such as impersonation fraud, and so account for 43% of total losses.