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UK Banks Face Record Fraud Losses
15 Jun
Summary
- Authorised push payment fraud losses climbed 19% to £576.4 million last year.
- Banks returned £354.3 million to victims under the reimbursement scheme.
- Sophisticated social engineering and AI aid fraudsters in investment scams.
In the past year, British banks witnessed a significant escalation in losses attributed to authorised push payment (APP) fraud, marking the steepest increase since the technology-driven scam boom during the COVID-19 pandemic. Industry data revealed that these losses, which encompass investment and purchase scams where individuals are tricked into transferring funds, rose by 19% to a total of £576.4 million. Banks collectively reimbursed £354.3 million to victims, operating under a unique UK mandate established in October 2024 that obligates reimbursement up to £85,000 per case.
Experts highlight the growing sophistication of fraudsters employing advanced social engineering techniques, often amplified by artificial intelligence. This trend has broadened the scope of potential victims. Investment scams, fueled by online advertisements promising high returns, alone accounted for £221.5 million in losses, reaching an unprecedented level. Purchase and romance scams also saw their highest figures. Calls are intensifying for technology platforms, including Meta, where many of these fraudulent activities commence, to implement stronger safeguards and share responsibility for the escalating financial crime.
An independent review of the current reimbursement rules is underway, with findings expected in early July. The Payment Systems Regulator has consistently advocated for increased measures from tech firms, alongside contributions from banks and telecommunications providers, to enhance user protection against these evolving threats.
