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UK Consumers conned out of £580 million by fraudsters in first half of 2023

Posted on 1 December 2023

UK Finance recently reported in its half year fraud report that fraudsters were responsible for nearly 1.4 million cases of fraud in the UK during the first half of 2023, amounting to over half a billion pounds in losses. That is, alarmingly, equivalent to one case every 12 seconds.

Approximately 40% of the losses – a staggering £239.3 million - stemmed from authorised push payment fraud, which has seen a 22% increase in cases compared to the first half of 2022. Such frauds are perpetrated in a number of ways, including purchase scams, investment scams, invoice scams and CEO scams. 

Purchase scams, where fraudsters set up fake online profiles or websites and advertise items that do not in fact exist, saw a significant rise in cases (43%) and accounted for two thirds of all authorised push payment fraud cases. Unsuspecting victims are led to input their personal details, including names, addresses, bank details and phone numbers for seemingly trustworthy transactions, only for those details to be subsequently used for much more sinister purposes. Romance scams, in which fraudsters manipulate victims into believing they are in a romantic relationship and then exploit the trust of victims to ask them for money, also saw a significant increase in cases, up 29% from the same period last year.

Investment scams, where victims are persuaded to invest in a fictitious investment on the promise of high returns, saw a slight decrease from last year. However, the losses in these types of scams tend to be higher and they accounted for almost a quarter of the total losses suffered as a result of authorised push payment frauds.

The emotional impact of fraud

Victims of fraud not only suffer a financial loss but also pay a price with the impact it has on their mental wellbeing. These sorts of crimes often involve ruthless manipulation of the victims and can be extremely distressing. Action Fraud data, shared with Which?, identified up to 18,000 reports made in 2020 where victims showed signs of severe emotional distress. Worryingly, Action Fraud also received hundreds of phone calls where a 'threat to life' was flagged.

What can be done to stem the tide? 

A person is more likely to be a victim of fraud than any other crime, and taken together with the emotional impact, it is vital that action is taken to prevent fraud and support victims.

The good news is that steps being taken by financial institutions to tackle fraud are having an impact.  UK Finance reported that banks prevented a further £651 million of unauthorised fraud through advanced security systems. Similarly, increased awareness, education and warnings to consumers are starting to see an effect. UK Finance reports that the number of impersonation scam cases, where the victim is persuaded to transfer money to a safe account by a criminal posing as a bank employee or police officer, fell by 35% in the first half of 2023.

However, more remains to be done, and the focus is shifting to the online technology sector to assist in the fight against fraud, recognising that a collaborative approach with involvement from all sectors is required.

Much of today's fraud originates online. Social media conveniently provides a screen for fraudsters to hide behind, leaving victims under a false pretence of who they are interacting with. The online environment enables fraudsters to contact significant numbers of people very quickly, allowing for more people to be targeted. Coupled with raised anxiety over finances due to the cost-of-living crisis, individuals can be more susceptible to the 'too good to be true' deals, which prey on this vulnerability to steal personal and financial information. With online dating platforms, social media sites, auction websites and telecommunications all being used to trap victims, the focus is beginning to shift to these sectors in the fight against fraud.

The Government's Fraud Strategy, published earlier this year, called on online technology companies to do more in the fight against fraud, and the provisions in the new Online Safety Act regarding fraudulent advertising are a significant step forward in this direction. Further, the launch of a voluntary Online Fraud Charter (one of the commitments set out in the Government's Fraud Strategy) will build on this, with major technology companies, including Amazon, Ebay, Facebook and Google signing up. The Charter calls on signatories to adopt measures to better protect users, including deploying verification measures for new advertisers and increasing levels of verification on peer-to-peer marketplaces and online dating services.

What can victims of fraud do?

Those who have fallen victim to fraud should be assured that all is not necessarily lost, and routes to recover monies through civil litigation should not be overlooked, particularly where significant sums have been lost. The English civil courts are used to dealing with fraud in all its forms, and despite the anonymous nature of many modern frauds, there are established tools available in order to identify fraudsters and trace and preserve assets and evidence. The courts are alive to the need to act quickly and effective remedies can be obtained in relatively short order. The key is for the victim to seek advice promptly.

If you have been or suspect you may have been a victim of fraud or would like more information or support, please get in touch with a member of our Fraud team.

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