Trade body UK Finance has reported that £145 million of the £500m was lost due to push payment (APP) scams, in which people are tricked into sending money to another account or paying in advance for non-exsistent products. This is an increase of £44m since last year, however, UK finance attributes this increase to four more banks reporting data.

Unauthorised fraud, where the transactions are made without the account holder’s knowledge, saw a further £358m stolen. In most instances of unauthorised fraud the victim is fully refunded, however, with APP scams there is currently no legal protection to cover their loses.

According to UK Finance, in the first half of the year the most prevalent APP scam was ‘purchase scams’, in which people are hoodwinked into paying for products or services that do not exist.

With most of these scandals occurring online, individuals often find themselves lured into making payments for cars or holidays that are never delivered or provided. 3,866 cases of impersonation scams were also reported, this is when a criminal pretends to be from a financial institution or law enforcement to get the account holder to transfer money.

With their trust manipulatively exploited many were persuaded to transfer large sums of money, with the average financial loss to victims of impersonation fraud amounting to £11,402.

New Figures Show Bank Fraud a Major Threat to the UK

The managing director for economic crime at UK Finance, Katy Worobec said that the figures underline the major threat bank fraud poses to the UK: “The criminals behind it target their victims indiscriminately and the proceeds go on to fund terrorism, people smuggling and drug trafficking, whether or not the individual is refunded.” She added that the industry was taking action to address the issue by upgrading and investing in security systems and cyber-defences.

Since January 2018, financial institutions have prevented two-thirds of unauthorised fraud. However, Gareth Shaw, head of consumer group Which?, disagrees with Worobec’s assessment saying that the banks’ efforts had been “woefully insufficient.”

Shaw commented: “It’s now two years since our super-complaint highlighted the lack of protection for victims of bank transfer scams, but these shocking figures show just how widespread the problem still is. Banks … have not done enough to protect their customers, who continue to lose life-changing sums of money to ever-more sophisticated crooks.

“The Payment Systems Regulator has rightly committed to introducing a reimbursement scheme for APP fraud victims. It’s about time that banks step up and properly compensate customers who have lost money through no fault of their own.”