Losses due to card fraud and cyber attacks leap by 26%


Financial fraud losses surged by 26% year-on-year in 2015 amid a growing threat from deception scams and cyber attacks, a report has found.

Some £755 million-worth of losses were recorded in 2015 across payment cards, remote banking such as internet and mobile phone banking, and cheques, Financial Fraud Action UK (FFA UK) found.

The figures also reveal that bank and card company security systems detected and prevented a total of £1.76 billion of fraud from happening in 2015 - equating to £7 in every £10 of potential fraud being stopped.

The body, whose members include banks and credit and debit card issuers, said the figures reflect the "increasing threat" from impersonation and deception scams, including criminals stealing people's details to commit identity fraud. 

A common way that criminals use to dupe someone into handing over their personal details is by cold calling, texting or emailing a victim, claiming to be from a trusted organisation, such as a bank, the police, a utility company or a government department.

Often, they will claim that the victim's account needs to be "updated" or "verified" and/or there has been suspicious activity on the victim's account. They will then try to trick the victim into handing over personal details which can be used to commit fraud. Sometimes, they will trick the victim into transferring money directly to them. 

There has also been a growth in sophisticated online attacks such as data breaches and malware, where malicious software is unknowingly downloaded onto a computer, FFA UK said.

Criminals use personal information stolen through data breaches to commit fraud directly, for example by using stolen payment card details to go on a spending spree online.

Within the financial fraud losses for 2015, losses on UK payment cards increased by 18% compared with the previous year, to reach £567.5 million.

FFA UK said fraud on contactless payments remains "low", equating to just 3.6p in every £100 spent using contactless technology. Fraud on contactless cards and devices represents just 0.5% of overall card fraud.

Meanwhile, remote banking fraud losses leapt by 72% compared with 2014, with £168.6 million-worth of losses recorded.

A key driver of this increase was the rise in impersonation and deception scams in which a criminal dupes the victim into giving away their personal and security details, FFA UK said. The criminal then uses these details to gain access to their victim's account. Criminals are also increasingly targeting business and high-net-worth customers, it said.

Meanwhile, cheque fraud losses totalled £18.9 million in 2015, a 6% fall from 2014.

Katy Worobec, director of FFA UK, said: "Banks work extremely hard to protect their customers, using highly sophisticated security systems which stopped 70% of attempted fraud from occurring last year.

"Any increase in fraud is unwelcome but the industry is continually evolving its response to fraud as it develops. This includes investing in new detection and verification tools, working with law enforcement and educating customers of dangers."

She said it is "vital" that consumers are alert to the dangers from scams and data breaches.

She said: "Everyone should be very cautious about giving out personal or financial information, and organisations holding data need to do all they can to protect people's private details."