A recent review of fraud controls among UK financial firms has revealed a mix in standards, and an amplified need for support for customers who have fallen victim to fraud. 

According to the UK Finance 2023 Half Year Fraud Update, over 116,000 individuals fell prey to APP (authorised push payment) fraud in the first half of this year alone. This is where victims are deceived into sending money to fraudsters posing as legitimate payees. 

The review of the financial fraud landscape led to the FCA unveil several key findings: 

• Many firms have room for improvement in their systems designed to detect and prevent fraud, and it is a critical component of safeguarding consumers. 
• Many firms don’t place enough focus on delivering positive consumer outcomes, which should be essential going forward. 
• Financial institutions need to enhance the support they give to individuals that have fallen to fraud. 
• Poor complaint handling is a prevalent issue, including response times. Customers reported receiving decision letters that were occasionally unclear, confusing, or contained unhelpful and, in some instances, accusatory language.
• Firms were not found to consider customer vulnerability when making decisions regarding fraud claims and complaints. 

The review has prompted regulatory authorities to work closely with financial firms to enhance their anti-fraud measures. The Smart Data Foundry, in Edinburgh was chosen by the FCA in September to provide synthetic data in support of the drive to tackle the problem of Authorised Push Payment (APP) Fraud.

The need for increased efforts to thwart fraud attacks goes beyond APP fraud too. According to Juniper Research, the two most common attack methods are account takeover and card-not-present fraud.

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Card-not-present represents the biggest proportion of card fraud in the UK, according to UK Finance’s 2023 annual fraud report. This type of fraud accounted for 81% of all card fraud cases and last year alone, led to an estimated £395.7 million in losses for victims in the UK. 

The key tenants of the advice offered by the FCA stands regardless of the type of fraud carried out, customer experience in the wake of an attack needs to be improved.