New figures from the banking and finance industry indicate authorised and unauthorised fraud cost the UK £580 million, with romance scams and ID theft spiralling.
Social engineering is the term used to describe a range of manipulative tactics scammers use to trick their victims into revealing personal or sensitive information or carrying out a specific action, such as authorising the transfer of money from one account to another.
Authorised Push Payment (APP) fraud involves victims being tricked into sending money from their bank account – by online or telephone banking – to a scammer’s account. Usually, they believe they are paying for a genuine product or service and willingly approve (‘authorise’) the money transfer; they do not suspect that fraud is taking place.
There are many different types of APP fraud, including:
- Romance scams
- Impersonation scams
- Cryptocurrency scams
- Investment scams
- Employment scams
- Conveyancing scams
It is usually only after the promised goods or services fail to materialise that the person realises they have become the victim of a scam.
People may feel embarrassed that they have been tricked, but it is important they report the crime to their bank and to Action Fraud, the UK’s Fraud and Cybercrime Reporting Centre. The police may launch a criminal investigation, and the bank should try and get the money back. However, scammers can quickly move the money– into another account, often overseas – making it difficult to trace and recover.
If a criminal investigation is unsuccessful, there are other ways to get your money back – read about APP Fraud Compensation Claims and how TLW Solicitors can help.
If social engineering doesn’t work and the scammer has not persuaded their victim to commit APP fraud, the scammer may still have enough information about that person to pretend to be them.
Unauthorised fraud happens when a scammer has managed to accumulate a victim’s name, addresses, account numbers, date of birth, mother’s maiden name, and so on, and is able to carry out fraud without any more direct help from the victim.
Looking again at the most recent UK Finance statistics, of the £580 million lost to scammers in the first half of the year, over £340 million was through unauthorised fraud. In other words, victims lost money from their bank accounts through the fraudulent use of their personal information, payment cards, online banking, and cheques. UK Finance reported that the losses included:
- £173.8 million by remote purchase or “card not present” fraud – using stolen credit or debit cards to make online or telephone purchases
- £33.1 million in card ID theft – the theft of personal information and card details allows scammers to take over existing accounts or apply for new credit cards or loans
It is important that if you notice a payment from your account that you didn’t authorise you contact your bank immediately. You will not be held responsible for any further unauthorised payments that might be made, and you should be able to ask your bank for a refund.
A UK Finance spokesman, Ben Donaldson, Managing Director of the Economic Crime department, said:
“Criminals are increasingly using social media, online platforms, texts, phone calls and emails to deceive victims into giving up their personal details and their money.”
Knowing that 77% of APP fraud cases start online and a further 17% via telecommunications is a good starting point. It should encourage us all to be aware of the possibility of fake adverts, emails, and messages.
UK Finance and the Government run a national awareness campaign called Take Five, urging us to stop and consider whether a request for personal or financial information is genuine. They outline several steps you can take to help protect yourself from fraud:
- Only give out personal or financial information to people or organisations that you have consented to and are expecting to be contacted by.
- If in doubt, contact the company directly using a known phone number or email address.
- Don’t click on links or files in an unexpected text or email.
- Never feel pressured into making financial decisions or transferring money.
- Go with your gut feeling – if something doesn’t feel right or seems too good to be true, question it.
On a positive note, UK Finance’s latest report records a 35% fall in the number of cases where criminals impersonated a bank or the police and asked customers to transfer money or hand over cash or goods. It appears that people are heeding the message that banks and genuine organisations will never:
- Contact you out of the blue and ask for your PIN or banking password.
- Ask you to withdraw money or transfer it to a ‘safe account’ for safekeeping or to prevent fraud.
- Send someone to your house to collect money, chequebooks or your PIN.
- Ask you to purchase goods, such as gift cards, in lieu of cash.
Ben Donaldson from UK Finance further said:
“The only way we will prevent fraud is if other sectors do much more to help us deal with the criminality which is increasingly taking place on their platforms.”
This comment was targeted at the online social media companies who have historically allowed fake adverts and misinformation to permeate their platforms. Liz Ziegler from the Lloyds Banking Group said their own research showed that more than two-thirds of online shopping scams started on Facebook.
When buying goods online, social media platforms such as Facebook, Instagram and TikTok may not offer the same buyer protection as online e-commerce sites like eBay. Similarly, they may not be able to verify that sellers are legitimate.
Would you trust a social media advert to inform your financial decision-making?
The UK’s financial services watchdog, the Financial Conduct Authority (FCA) has been working hard to clamp down on misleading adverts on social media. It recently announced new regulations around ‘finfluencers’ and cryptocurrency investments, with much tighter requirements for FCA authorisation.
Social media platform owners, like Meta (who runs Facebook, Instagram and WhatsApp) and TikTok’s ByteDance, are under pressure to do more to protect customers from fraud, with one bank Chief Executive, TSB’s Robin Bulloch, calling on Meta to implement urgent tech interventions, such as secure payment systems and filters to block clearly fraudulent adverts. There is also pressure on the Government to introduce legislation that will make the big tech companies, whose platforms carry these adverts, pay compensation to fraud victims.
TLW Solicitors has seen firsthand the financial, psychological and emotional harm that fraud and scams can cause. Often the people who have been targeted are vulnerable and can’t afford to lose large sums of money.
Sarah Spruce, Head of the APP Fraud Claims team, says:
“The figures published in the latest report from UK Finance really are very concerning, though I fear they aren’t truly accurate – many people don’t report financial loss as a result of scams and fraud, as they are too embarrassed, so the real figure could be much higher.
“It is encouraging to see how much money the banks prevented from being lost through unauthorised fraud and that impersonation scam numbers have fallen. We are also encouraged by the growing number of successful compensation claims we are able to help our clients with – getting back the money that’s rightfully theirs.
“The financial industry needs to keep spreading the word about financial fraud and how people can protect themselves, as well as implementing new, tougher security measures so that scammers can’t get their hands on our money in the first place.”
We provide regular updates and insights about APP fraud scams, including information on how to make a claim. Our team will discuss your case with you and decide whether it is suitable to take forward. If it is, we will enter into a ‘no-win no-fee’ agreement, meaning that, if your case is unsuccessful, we will not charge for the time we have spent on your case.
If you, your friend or a relative has been conned into making payments to a scammer via online or telephone banking, please get in touch.
You can call us on 0800 169 5925, email firstname.lastname@example.org or complete one of the forms below.
It is important to get advice as soon as possible as strict time limits can apply.
Minimum case values apply.
Meet Sarah, who heads up our experienced Authorised Push Payment Fraud Claims team.
Sarah and her colleagues are on hand to help with your claim.
- Always fight your corner.
- Explain anything you don't understand.
- Provide full transparency on our charges.
- Never ask for any upfront payment.
- Recover the best compensation we can.
- Keep your personal information safe.
- Respond quickly to any queries.