A banking and finance industry body has warned that fraudsters are changing their methods to purchase items online using stolen information, sometimes deceiving individuals into revealing their one-time passcodes.
UK Finance reported 3.13 million cases of unauthorised fraud in 2024, marking a 14 per cent increase compared to 2023.
These cases involve money being taken from an account by a third party without the account holder’s consent.
The total losses from unauthorised fraud reached £722 million in 2024, a 2 per centannual increase.
One primary factor contributing to this rise is the increase in remote purchase fraud, which had been declining in recent years, according to UK Finance.
In this type of fraud, criminals use stolen card details to make purchases online, over the phone, or through mail order.
Remote purchase fraud case numbers increased by 22 per cent to nearly 2.6 million, and losses increased by 11 per cent to nearly £400 million.
UK Finance said criminals are using social engineering to trick people into divulging one-time passcodes (OTPs).
Once they have an OTP, a criminal is often able to authenticate fraudulent transactions or to register compromised card details for digital wallets.
Victims of unauthorised fraud cases are legally protected against losses and UK Finance research indicates that customers are fully refunded in more than 98 per cent of unauthorised fraud cases.
Meanwhile, the number of authorised push payment (APP) fraud cases, where people were tricked into transferring money to fraudsters, fell by a fifth (20 per cent) last year.
Some 186,000 APP fraud cases were recorded by UK Finance – the lowest figure since 2020.
APP losses fell by 2 per cent to just over £450 million in 2024.
Despite the fall in APP scam reports, UK Finance said there was a “notable increase” in international payments being made as part of APP fraud, with criminals likely trying to persuade people to send money outside of the UK.
International payments accounted for 11 per cent of APP losses in 2024, up from 6 per cent in 2023.
The general decline in APP fraud cases was driven by a range of factors, including investing in technology that can help identify and flag potentially fraudulent activity, as well as consumers being made aware of frauds, the report said.
The biggest amount of APP losses was due to investment fraud, which happens when a criminal convinces their victim to move their money to a fictitious fund or to pay for a fake investment.
UK Finance said £144.4 million was stolen through this type of fraud in 2024, rising by a third (34 per cent) compared with 2023, despite a reduction in cases.
Purchase scams, when a victim pays in advance for goods or services that are never received, continued to be the most common type of APP fraud.
New rules, overseen by the Payment Systems Regulator (PSR), require banks to give people their money back when they have been tricked into transferring it to criminals.
An authorised push payment (APP) reimbursement limit of £85,000 has been applied under the rules, although banks can choose to go further than this and repay higher amounts.
The rules were introduced in October 2024 and the PSR recently said that a “high proportion” of scam victims are getting their money back.
Looking at compliance data reported by payment service providers, the PSR recently said that in the first three months of the initiative, 86 per cent of money lost to APP scams was returned to victims.
Before the rules were introduced, many banks had signed up to a voluntary code to reimburse customers.
UK Finance’s figures showed that, last year, £267.1 million of APP fraud was reimbursed to victims by banks, representing around 59 per cent of the money stolen from APP fraud.
It said that its data covers a wider range of payments and account types than those covered by the new rules from the PSR which means that they are not directly comparable.
UK Finance said 70 per cent of APP fraud cases were confirmed as having started on online platforms, leading to 29 per cent of losses. However, frauds starting by telecoms accounted for bigger losses, at 36 per cent.
In total, criminals stole £1.17 billion through unauthorised and authorised fraud in 2024, which was broadly unchanged from 2023, UK Finance said.
However, case numbers jumped by 12 per cent last year, compared with 2023, to stand at 3.31 million.
The report said: “While this points to a reduction in the average loss per case, criminals are targeting ever more victims in order to maintain flows of illicit funds with more people having to deal with the resulting stress, inconvenience and emotional harm that entails.”
Banks prevented £1.45 billion of unauthorised fraud last year.
Ben Donaldson, managing director of economic crime at UK Finance, said: “Fraud continues to blight this country, with over £1 billion stolen by criminals in 2024.
“This causes severe harm to individuals, society and our economy as the stolen money goes to serious organised crime groups, both here and abroad.
“The financial services industry works tirelessly to protect customers and prevent billions more being stolen by fraudsters, but we know that criminals are always looking for new ways to exploit victims.
“To deal with this threat, we need a more proactive approach with the public and private sectors working more closely together and using data and intelligence more effectively.”
Jim Winters, head of financial crime at Nationwide Building Society, said: “While it’s positive to see authorised push payment cases coming down following regulatory changes and investment in technology, fraud-related crimes remain chronically unreported.”
Santander UK’s head of fraud risk management, Chris Ainsley, said: “If the 70 per cent of authorised push payment cases which originated online, and the 16 per cent which emerged through telecoms networks, were prevented at source, it’s obvious that fraudsters would not have the opportunity to target the vast number of consumers that they do today.”
Here are the sources of APP fraud in 2024, with the number of cases this represents as a percentage, followed by the value of losses this represents as a percentage, according to UK Finance:
Online, 70 per cent, 29 per cent
Telecommunications, 16 per cent, 36 per cent
Email, 1 per cent, 10 per cent
Other, 3 per cent, 7 per cent
Unknown, 10 per cent, 18 per cent
