Hundreds of millions lost via authorised fraud in 2018

The finance industry prevented £1.66 billion of unauthorised fraud during 2018, effectively stopping £2 in every £3 of attempted unauthorised fraud, according to the latest report, Fraud the Facts 2019 published today from UK Finance.

During the same period, a total of £1.20 billion was stolen by criminals committing both authorised and unauthorised fraud.

Industry research suggests that the theft of personal and financial information through social engineering caused by data breaches outside the financial sector was a major contributor to the fraud losses.

Stolen data is used to commit fraud both directly and indirectly. There were several high-profile data breaches involving significant brands during 2018.

“Fraud is a crime which poses a major threat to us all – it can have a devastating impact on victims and the money stolen funds even more damaging crimes such as terrorism, drug trafficking and people smuggling,” UK Finance managing director of economic crime Katy Worobec said.  

She explained that every business, from online retailers to social media companies, as well as the public sector, has a duty to work together to beat fraud and prevent stolen data getting into the hands of criminals.

In an unauthorised fraudulent transaction, the account holder themselves does not provide authorisation for the payment to proceed and the transaction is carried out by a third-party. Customers are legally protected against losses caused by unauthorised fraud. Industry research indicates that customers are fully refunded in over 98 per cent of unauthorised fraud cases.

Total losses due to unauthorised fraud across payment cards, remote banking and cheques in 2018 were £845 million, an increase of 16 per cent compared to 2017.

In an authorised push payment (APP) scam, a customer is duped into authorising a payment to another account which is controlled by a criminal. Data for 2018 shows that authorised scams swallowed £354 million.