UK Finance has released its latest fraud report covering the first half of 2022; reiterating calls for intersectoral action to attack cybercriminals.
According to the report, criminals stole more than £609.8 million through authorized and unauthorized fraud in the first half of 2022, a 13 per cent decrease on the first half of 2021.
Of this total, unauthorized fraud losses were £360.8 million and Authorized Payment Fraud (APP) losses were £249.1 million.
The decline has been attributed to the first half of 2021 being an exceptionally high period for fraud and therefore not indicative of the start of a downward trend.
While the conclusion of the pandemic has seen a drop in overall fraud losses, the report shows how some types of fraud have risen as criminals continue to adapt their methods.
On the offensive, the banking and finance industry worked to prevent criminals from seizing an additional £583.9m in unauthorized fraud.
Victims of unauthorized payment card fraud are legally protected from loss. Industry analysis shows that customers are reimbursed in more than 98 percent of all confirmed cases.
As much fraud starts from criminal activity that takes place through online and technology platforms, UK Finance and its members have used this report to call for more cross-sector action to tackle the problem at its source.
“As we have previously warned, the level of fraud in the UK is such that it should be considered a national security threat.” Katy Worobecmanaging director of economic crime at UK Finance, says in the report.
“The industry is continually focused on addressing the threat as we know criminals continue to find new ways to exploit potential victims,” says Worobec.
“However, criminal gangs simply bypass the advanced security measures that banks have in place and instead target the customer directly, often outside the confines of the banking system.”
She continues: “This is why it is key that other sectors work with us to combat fraud, as it remains a persistent threat to businesses, consumers and the growth of the economy, not to mention the UK’s reputation as a place to do business. ”
Leading the industry response to the UK Finance report, column lyonsCEO and founder of Friend-IDsays that when it comes to fraud, financial service providers must adopt a ‘not if, but when’ mindset.
“It’s positive to see the reduction in fraud cases in the same period last year,” says Lyons. “Solutions that simplify fraud prevention so that businesses of any size can benefit from them have led to the growing adoption of anti-fraud technology in more industries.
“Fraud is an ever-present threat to both organizations and individuals, and steps must be taken to protect both from this risk.
“Identifying fraudsters before they can cause harm is critical to this and having strong digital identification and verification processes in place that can prevent fraud at the source is key.”
Adding to the narrative, Kate Frankdirector of business development and anti-fraud leader in Pay.UKexplains that while fraud has slowed compared to previous years, its threat continues to have a devastating impact on consumers and businesses.
“Fraudsters are adapting to new circumstances with alarming agility and will continue to take advantage of those feeling the financial strain of the cost-of-living crisis,” says Frankish.
“It is critical that all institutions involved come together to outwit fraudsters and help protect people when they are most vulnerable.
“A coordinated cross-industry effort between banks, government, law enforcement, regulators, and technology, telecom, and social media companies is key to effectively addressing fraud in real time.”