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UK Finance Fraud Report: key insights from the first half of 2024

UK Finance Half Year Fraud Report
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Fraud remains one of the biggest challenges facing the UK’s financial sector. The latest UK Finance Fraud Report for the first half of 2024 reveals both alarming trends and hopeful progress. As criminals continue to evolve their tactics, businesses and consumers alike must stay vigilant. At Neopay, we focus on helping businesses maintain compliance while implementing strong preventative measures. This report underlines the importance of such efforts.

Key highlights:

  • Over £570 million stolen in payment fraud: This staggering amount was stolen in just six months, showing the persistence and adaptability of fraudsters.
  • Fraud cases rose by 16%: The increase in fraud cases compared to the same period in 2023 is a stark reminder of the ongoing threat posed by financial crime.
  • The value of losses fell by 1.5%: While the number of cases increased, the total value of fraud losses decreased slightly, a sign that prevention methods are becoming more effective.
  • Over £710 million of fraud was prevented: This is a 13% increase from the previous year, showing the industry’s growing success in detecting and preventing fraud before it happens.

Unauthorised fraud: a persistent threat

The rise in unauthorised payment fraud was a key driver behind the increased fraud cases in early 2024. The report notes a 19% increase in unauthorised card fraud, with over 1.5 million cases reported. This type of fraud typically involves stolen card details being used for purchases, and the increase suggests that criminals are finding new ways to bypass existing security measures.

Despite this rise, there was some good news. Banks prevented £710.9 million in unauthorised transactions, meaning £6.65 out of every £10 of attempted fraud was stopped before it could result in a loss. This success is due to increased investment in detection systems, highlighting the importance of ongoing innovation in fraud prevention.

Remote purchase and push payment fraud

Remote purchase fraud, where criminals use stolen card details to buy goods online, surged by 26% in terms of cases and 11% in terms of losses. While the industry’s efforts to implement Strong Customer Authentication (SCA) have helped reduce these numbers in the past, criminals are becoming more adept at bypassing these protections. Many are tricking consumers into sharing one-time passcodes (OTPs) through sophisticated social engineering tactics.

Similarly, Authorised Push Payment (APP) fraud continues to be a major issue, although the first half of 2024 saw an 11% reduction in total losses compared to the same period last year. APP fraud occurs when victims are tricked into sending money directly to a fraudster’s account, often through impersonation or false offers of goods and services. The report notes that while the number of cases fell by 16%, £213.7 million was still lost to APP fraud in the first half of the year.

Emerging trends: social media and telecoms

A crucial takeaway from the report is the growing role of social media and telecommunications networks in enabling fraud. Fraudsters are increasingly using these platforms to initiate scams, with 72% of APP fraud cases originating from online platforms and 16% being linked to telecommunications channels. These scams often involve criminals using fake profiles, deceptive adverts, and impersonation tactics to convince victims to part with their money or personal information.

The report also highlights how fraudsters are adapting their methods in response to the industry’s prevention efforts. For example, while card-not-present (CNP) fraud has increased, there has been a decline in counterfeit card fraud, which has fallen by 13% to its lowest level since data collection began. This decline is largely attributed to the widespread adoption of chip-and-PIN technology, which has made it harder for criminals to use counterfeit cards, particularly in face-to-face transactions.

APP reimbursement rules

As of October 2024, new mandatory reimbursement rules for APP fraud are in effect. Under these rules, victims of APP fraud who have met the required standards of caution are more likely to be reimbursed by their banks. This is a significant shift from the voluntary code that has been in place since 2019 and is expected to improve consistency across the industry. However, as the report notes, while reimbursement is important, it is not a substitute for prevention. The psychological harm and financial disruption caused by fraud cannot be undone through reimbursement alone.

To read the full UK Finance Half Year Fraud Report, click here.

How Neopay can help

At Neopay, we understand the complexity of today’s fraud landscape. With fraud cases on the rise and criminals continuously evolving their tactics, it’s essential for businesses to stay ahead of the curve. Here’s how we can support you:

  • Fraud prevention audits: Our audits help identify vulnerabilities in your business’s payment and security processes. By highlighting potential risks, we enable you to implement the necessary safeguards to protect against fraud.
  • Compliance framework development: Ensuring your business meets all regulatory requirements is critical in avoiding penalties and reputational damage. We offer tailored compliance solutions that align with the latest industry regulations and fraud prevention strategies.
  • Training and awareness programs: One of the most effective ways to prevent fraud is to ensure that your staff are aware of the latest threats. We provide engaging training programs that focus on practical, real-world scenarios, helping your team stay vigilant and equipped to identify suspicious activities.
  • Ongoing support: Fraud is not a static threat. We provide continuous support, including regular updates on new fraud trends, changes in regulation, and best practices for maintaining robust security measures.

By working with Neopay, businesses can take a proactive approach to fraud prevention, ensuring that they are well-prepared to tackle the challenges of a rapidly changing fraud landscape. Contact our team to find out more about how we can protect both your business and your customers from the growing threat of fraud.

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