Wealth Manager - the site for professional investment managers

Register free for our breaking news email alerts with analysis and cutting edge commentary from our award winning team. Registration only takes a minute.

Fraudsters swindle £500 million in first half of 2018

Fraudsters swindle £500 million in first half of 2018

Criminals stole £503.4 million from the public in the first half of 2018, according to data from trade association UK Finance.

More than £145 million of the total figure was stolen in authorised push payment scams (APPs), where victims send money to an account under control of a fraudster. 

There were also 3,866 reported cases of impersonation fraud, in which the perpetrator pretends to be a figure from an organisation such as a bank or the police and tricks the victim into transferring money.

Managing director of Economic Crime at UK Finance, Katy Worobec, highlighted the illicit uses such as terrorism and drug trafficking to which the proceeds of scams can be put.

She said: ‘The finance industry is committed to fighting back, investing millions in security systems and cyber defences to protect customers.

‘We have brought in new standards to ensure scam victims get the help they need from their payments provider; we are supporting law enforcement in disrupting the criminals and freezing stolen money; and we are assisting the government in improving intelligence sharing to extinguish the threat.’

According to UK Finance, the industry successfully prevented £705.7 million of unauthorised fraud in the first six months of 2018, or around £2 in every £3 of attempted unauthorised fraud. In unauthorised fraud, a third-party takes money from the accountholder without their permission.

While combined total losses from this type of fraud fell 2% year on year to £358. million, the overall number of reported cases rose 10% to 1,036,376.

Investment related APPs accounted for £21 million across a total of in 1,359 cases – an average of £15,305 per case.

Purchase scams – in which victims pay in advance for a product or service which is never delivered – were the most prevalent type of APP fraud, accounting for 21,483 cases and £19.4 million in losses.

UK Finance suggested that social engineering, in which people are manipulated into giving away personal or financial details or transferring money, was the key driver of both unauthorised and authorised fraud losses in the first half of the year.

Stolen data continues to be a major enabler of fraud in the UK, with criminals using information gaining from means such as malware and phishing in impersonation scams or to make unauthorised payments.

The findings come after a KPMG report in August found that a record number of fraud cases reached UK courts in the first half of this year, with up to £895 million allegedly defrauded in cases being heard during the period.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
2 Comments Play Tim Steer: how to spot a stock disaster coming

Tim Steer: how to spot a stock disaster coming

The former Citywire AAA-rated fund manager has written a book on 22 stock disasters and how forensic examination of annual reports could have spotted them coming.

Play CEO tapes: the gap between best and worst alternatives is stark

CEO tapes: the gap between best and worst alternatives is stark

In the final part of our series we take a look at the rise of illiquid investing and whether it really serves in clients best interests.

Play CEO Tapes: dangerous data and great technology

CEO Tapes: dangerous data and great technology

In the third part of our latest series the debate turns to technology and the huge impact it is having on the fund management industry.

Read More
Wealth Manager on Twitter