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Fraud victims lost £1.3BILLION last year in romance, investment and bank scams

Fraud victims lost £1.3bn in romance, investment and banking scams last year as online crime rose by as much as 165% after the lockdown.

Nearly 200,000 people were tricked into transferring money directly to criminals in 2021, according to figures from a trade association.

UK Finance said around £583.2m was stolen from authorized push payment fraud (APP) last year – a 39% increase compared to £420.7m in APP losses in 2020.

These losses were split between personal (£505.8 million) and non-personal or corporate (£77.4 million) customers, with nearly 40% of them in total due to impersonation scams.

Money was also lost through purchase scams and investment scams, with billing and romance scams also among the series of frauds.

A total of £271.2 million in losses was returned to victims of APP scams, accounting for less than half (47%) of the losses.

Fraud victims lost £1.3bn in romance, investment and banking scams last year as online crime rose by as much as 165% after lockdown (stock photo)

Fraud victims lost £1.3bn in romance, investment and banking scams last year as online crime rose by as much as 165% after lockdown (stock photo)

UK Finance recorded 195,996 cases of APP scams in 2021. Of this total, 188,964 cases were in personal accounts and 7,032 cases in non-personal accounts.

Criminals impersonated a range of organisations, including the NHS, banks and government agencies via phone calls, text messages, emails, fake websites and social media posts to trick people into handing over their personal and financial information, UK Finance said. They used this information to convince people to approve a payment.

Many banks have signed a voluntary code on APP scams that reimburse people in cases where neither they nor their bank is at fault. However, there are concerns that the code is not always applied consistently.

The government has previously said that the Payment Systems Regulator (PSR) can require banks to reimburse APP scam losses under measures in the Financial Services and Markets Bill.

Banks can also sign up for a “159” pilot, an initiative that encourages consumers to hang up a phone call that may be a scam and call 159 to speak with their bank.

Looking specifically at cases dealt with under the voluntary code, 51%, or £238.1 million in losses, were returned to customers last year, the report said.

In total, more than £1.3 billion was stolen through fraud and scams in 2021, according to UK Finance.

Losses from unauthorized financial fraud involving payment cards, remote banking and checks were £730.4 million in 2021, down 7% from 2020.

UK Finance added that last year the banking and finance sector prevented a further £1.4bn of unauthorized fraud from falling into the hands of criminals – the equivalent of 65.3 pence for every £1 attempt at unauthorized fraud stopped without loss.

It has long said it has called for more cross-sectoral action to tackle scams and will continue to work with the government on upcoming legislation in this area.

One of the most high-profile fraud cases involved a scammer who injected a vulnerable 92-year-old woman with a fake coronavirus shot, before demanding £160 to do so.

The scammer called ahead to check if the woman living in Surbiton, south London, was older, vulnerable and living alone, one of her relatives told MailOnline.

Police investigating the ‘scumbag’ criminal initially thought he had gone door-to-door when he stabbed the older woman in the arm with a ‘dart-like implement’.

But now it has been revealed that he allegedly called his victim, first posing as an NHS employee to get information about her living situation in her £500,000 home.

He said he administers vaccines and then quickly made an appointment to see her after voluntarily telling her she was living alone.

CCTV footage captured a suspected fraudster calling a 92-year-old claiming he was from the NHS before administering a fake vaccine and demanding £160 from the victim

CCTV footage captured a suspected fraudster calling a 92-year-old claiming he was from the NHS before administering a fake vaccine and demanding £160 from the victim

Katy Worobec, director of economic crime at UK Finance, said: ‘Last year, losses from unauthorized fraud fell, but this type of criminal activity remains a major problem.

“By introducing new measures such as strong customer authentication, coupled with continued investment in technology, the banking and financial sector is preventing significant amounts of fraud from occurring.

Losses from permitted fraud have risen again this year as criminals target 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.

That’s why we continue to call on other industries to play a greater role in protecting customers from the scourge of fraud.

‘The forthcoming Economic Crime and Business Transparency Act is an important development and offers the government the opportunity to give new powers in the field of information sharing and tracing stolen money.

“These are things we’ve long asked for and will support those efforts to work together and stop the fraud in the first place.”

UK Finance is urging clients to follow the advice of the Take Five to Stop Fraud campaign and to remember that criminals are experts at impersonating people, organizations and the police.

They will spend hours investigating people for their scams and may try to pressure people into making a decision they will later regret.

People should immediately contact their bank if they believe they have been scammed and report it to Action Fraud.

Emma Lovell, chief executive of the Lending Standards Board (LSB), which oversees the voluntary refund code for APP scams, said: “The most important question all sectors and industries should be asking is how do we prevent APP scams from happening.” occurs?

‘No one should get into trouble because of criminal activities. There is some evidence that scams affect the mental health of victims, creating long-lasting feelings of guilt and shame.

‘Compensation alone cannot undo this damage, nor can the fact that the proceeds of fraud often finance organized and other serious crime.’

Here’s how different types of authorized fraud losses added up in 2021, according to UK Finance, and the annual percentage increase:

  • Investment scam, £171.7 million, 57%
  • Impersonation fraud: police/bank staff, £137.3 million, 51%
  • Impersonation scam: Other, £77.5 million, 39%
  • Purchase scam, £64.1 million, 25%
  • Billing and Mandate Scams, £56.7M, minus 17%
  • Advance fraud, £32.1 million, 45%
  • Romance Scams, £30.9 million, 73%
  • CEO fraud, £12.7 million, 165%

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