According to UK Finance’s Fraud the Facts report, fraud losses in the UK in 2021 reached a staggering £1.31 billion.

Fraud has been a growing problem for some time. Still, it was exacerbated by the pandemic in 2020, as scammers could take advantage of everyone working remotely and socialising online. They also took advantage of people’s uncertainty and fears regarding Covid-19.

Also, scammers are exploiting the cost of the living crisis to their advantage by taking advantage of the escalating prices.

Total fraud losses in the UK 2016 – 2022

2016 – £768.8 million
2018 – £844.8 million
2020 (start of pandemic) – £1.26 billion
2021 – £1.31 billion

What are the worst types of fraud in the UK?

In 2021, £524.5m was lost as a result of unauthorised debit and credit card fraud. This includes the following types of fraud:

– Remote purchase fraud – 79%

–  Lost and stolen cards – 15%

–  Card ID theft – 5%

–  Counterfeit cards – less than 1%

–  Card not received – less than 1%

Remote purchase/card not present fraud – £412.5m total losses

This is when a criminal uses stolen card details to purchase items over the internet, phone, or through mail order.

Lost and stolen cards – £77.2m total losses

This is when a criminal uses a lost or stolen card to make purchases in store, online, or takes money out at an ATM or in a bank branch.

Card ID theft – £26.3m total losses

This is when a criminal uses stolen card details, along with someone’s personal information, to open to take over an account in that person’s name.

Counterfeit cards – £4.7m total losses

This is when a criminal creates a fake card using the details obtained from the magnetic strip of someone’s card.

Card not received fraud – £3.9m total losses

This is when a card is stolen in transit – so between the card issuer sending out the card and the customer receiving it. It is then used to make fraudulent purchases, payments, or cash withdrawals.

APP Scams – what are they and why are they so dangerous?

In 2021, 44% of overall total losses was a result of authorised push payment (APP) scams. In monetary terms, that’s £583.2 million.

An authorised push payment (APP) scam is when a fraudster has successfully tricked someone into sending them money via bank transfer. They do this because there are less protections in place for bank transfers than there are for debit and credit card payments.

APP scams make up such a large proportion of total fraud losses as it involves all scams where they are impersonating a genuine company or individual in an effort to trick people into sending them money via bank transfer. Some of the types of scams included are:

• Investment and pension scams
• Romance scams
• Invoice fraud
• Selling fake goods and services 
• Delivery scams
• Charity scams
• Lottery scams
• HMRC scams

Due to the ‘APP scam voluntary code’ introduced in May 2019, victims have had an easier time getting their money back after falling for an APP scam. The vast majority of banks signed on to this code to commit to compensating their customers when they have met the standards expected of them under the code.

Since 2019, 47% of losses assessed since the code was introduced have been reimbursed to victims.

While the banks are now doing more to reimburse victims, that does not mean these scams should be taken less seriously. Year after year, the number of cases keeps increasing, and nothing can be done to stop them.

Although a reimbursement rate of 47% is a big step in the right direction, it still gives you a 50/50 chance of getting your money back. The time and effort this takes and the emotional stress this can cause are also considerable.

Why is fraud awareness the answer?

Unfortunately, nothing can be done to stop scammers from taking advantage of people. There are indeed scammers operating within the UK, but many phishing emails and cold calls originate from other countries, making them virtually untraceable and difficult to prosecute.

Additionally, as we move more and more processes online, we become more vulnerable to scammers as we transfer more personal information and spend more time online.

Millions of phishing emails and cold calls are sent out every day by scammers, making them impossible to avoid. You can avoid falling victim to these scams by being aware of the tactics scammers use, their contact methods, and what to do when you are targeted.

 To avoid falling victim to scams, keep yourself up to date with the latest techniques as scammers constantly update their strategies.

KS Finance has produced this useful guide for consumers to use as a reminder of the most important things to watch out for in order to protect themselves from fraud.