Financial fraud losses across payment cards, remote banking and cheques totalled £768.8 million in 2016, an increase of 2 per cent on the previous year, figures from Financial Fraud Action UK show.
The new data shows banks and card companies prevented £1.38 billion of fraud last year, equivalent to £6.40 in every £10 of attempted fraud being stopped.
Impersonation and deception scams, as well as online attacks to compromise data, continued to be the primary drivers behind financial fraud losses in 2016. In all of these methods criminals target personal and financial information, including card data, which is then used to facilitate fraud.
The 2016 financial fraud data shows:
- Losses due to payment card fraud were £618.0 million, an increase of 9 per cent from £567.5 million in 2015. A total of £982.4 million of attempted card fraud was prevented by banks and card companies, equivalent to £6.10 in every £10 of fraud being stopped.
- Over 2016, card spending increased by six per cent, meaning card fraud as a proportion of spending equates to 8.3p for every £100 spent.
- Within the overall card fraud figures, losses on card purchases made remotely increased by 9 per cent to £432.3 million.
- Remote banking fraud losses totalled £137.1 million, a 19 per cent decrease from £168.6 million in 2015. A total of £205.4 million of attempted remote banking fraud losses were prevented, equivalent to £6 in every £10 of fraud being stopped.
- Cheque fraud losses fell by 28 per cent to £13.7 million, the lowest ever annual total. A total of £196.2 million of attempted cheque fraud was prevented, equivalent to £9.40 in every £10 of fraud being stopped.
- There were a total of 1,857,506 cases of financial fraud.
Katy Worobec, Director of Financial Fraud Action UK (FFA UK), said:
“Banks take the threat of fraud extremely seriously and continuously invest in advanced detection and verification systems to protect customers. At the same time criminals continue in their attempts to circumvent this security by targeting customers for their personal and security information. It’s vital that everyone follows the advice of our Take Five campaign and safeguards their details.
“The payments industry can’t stop all fraud on its own, so it’s essential that every organisation with a role to play unites to tackle it. We are particularly working with law enforcement and government, through the Joint Fraud Taskforce. It’s also vital for any organisation holding personal data to ensure they have robust systems in place to prevent data breaches.
“Across the industry, and with partners, we are developing new processes to help police intervene when potential victims visit a bank branch, and we are exploring new ways to track stolen funds moved between multiple bank accounts.”
The full set of financial fraud data for 2016, including breakdowns by fraud type, has been published today by FFA UK, the organisation leading the collective fight against financial fraud on behalf of the payments industry.
The bulletin explains that criminals use impersonation and deception scams to target customers for their personal or financial information, such as passwords, payment card details or bank account information. The criminal purports to be from a legitimate and trusted organisation, such as a bank, the police, a utility company or a government department and typically contacts a customer by means of a phone call, text message or email.
The fraudulent approach may involve a claim there has been suspicious activity on an account, account details need to be ‘updated’ or ‘verified’, or a refund is due. Intelligence suggests there has been an increase in more sophisticated phishing emails purporting to be from major online retailers and internet companies, brands which a large proportion of recipients are likely to use.
FFA UK is running the Take Five to Stop Fraud campaign, backed by every major bank and card company, to raise awareness of these scams and how customers can protect themselves. Earlier this month there was a dedicated day of activities in thousands of bank branches across the country as part of the campaign.
Take Five urges people to guard their personal and financial details and never to assume an email, text or phone call is authentic, even if it includes a reference to some of their basic details. It reminds people to pause and think carefully before responding to any requests for information and not to be pressured into making decisions.
Information gained from data breaches also continues to be a driver of fraud. This data may also be used to commit fraud directly, for example the use of stolen card details to make remote purchases.
FFA UK is urging any organisation that holds personal and financial information to ensure it has robust security systems in place to prevent a data breach. There are a number of tools to build up customer profiles which can be used by retailers who sell remotely, so cardholders can be verified and payment can be received securely.
Tackling fraud effectively requires a combined response across a range of organisation. FFA UK has a central role in the Joint Fraud Taskforce, which is using the collective powers, systems and resources of government, law enforcement and industry to crack down on financial fraud.
Tony Blake, senior fraud prevention officer at the Dedicated Card and Payment Crime Unit, said:
“Fraudsters are often extremely professional, so it’s important that you stay alert and guard your personal and financial details. Always take a moment to consider carefully any requests for your information and never disclose your security details, such as your PIN or full banking password.
“Criminals will do all they can to scare and pressure you into acting quickly without thinking. Don’t let anyone rush you. If you are ever the slightest bit unsure, put the phone down or don’t reply to the text or email. Instead contact the organisation on a phone number that you trust, such as the one on their official website.”
Anyone who thinks they have been a victim of fraud should contact their bank and Action Fraud immediately.
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Notes to editors:
- FFA UK has launched Take Five to Stop Fraud, a national behaviour change campaign. The campaign asks consumers to help protect themselves from financial fraud by remembering some simple advice:• Never disclose security details, such as your PIN or full password – it’s never right to reveal these details• Don’t assume an email request or caller is genuine – people aren’t always who they say they are• Don’t be rushed – a bank or genuine organisation won’t mind waiting to give you time to stop and think
• Listen to your instincts – if something feels wrong then it is usually right to pause and question it
• Stay in control – have the confidence to refuse unusual requests for information
- Financial Fraud Action UK (FFA UK) is responsible for leading the collective fight against fraud in the UK payments industry. Its membership includes the major banks, credit, debit and charge card issuers, and card payment acquirers. Through industry collaboration FFA UK seeks to be the authoritative leader in defending consumers and businesses from financial fraud, by creating the most hostile environment in the world for fraudsters.
FFA UK’s primary role is to drive collaborative action to reduce the impact of financial fraud and scams both across the industry, and with partners in the public sector, private sector, and law enforcement. It operates its own data and intelligence sharing bureau and sponsors a fully operational police unit.
3. The Cheque & Credit Clearing Company (C&CCC) is the industry body that manages the cheque clearing system in Great Britain, including the processing of bankers’ drafts, building society cheques, postal orders, warrants and government payable orders. Its wide remit covers the management of the systems for clearing paper bank giro credits, euro-denominated cheques and US Dollar cheques. C&CCC shares information with Financial Fraud Action UK regarding fraudulent activity in the cheque and credit clearing world.
4. The UK Cards Association is the trade body for the card payments industry in the UK, representing financial institutions which act as card issuers and acquirers.
The Association promotes co-operation between industry participants in order to progress non-competitive matters of mutual interest; informs and engages with stakeholders to shape legal and regulatory developments; develops industry best practice; safeguards the integrity of the card payments industry by tackling card fraud; develops industry standards; and co-ordinates other industry-wide initiatives such as those aiming to deliver innovation. As an Association we are committed to delivering a card payments industry that is constantly focused on improved outcomes for the customer.
5. The Dedicated Card and Payment Crime Unit (DCPCU) is a unique pro-active police unit, with a national remit, formed as a partnership between Financial Fraud Action UK, the City of London Police and the Metropolitan Police together with the Home Office. It is fully sponsored by the cards and banking industries, with an on-going brief to investigate, target and, where appropriate, arrest and seek successful prosecution of offenders responsible for card, cheque and payment fraud crimes. It is headed up by a Detective Chief Inspector and comprises officers from the Metropolitan and City of London police forces who work alongside banking industry fraud investigators and support staff.