Authorised Fraud Cases Increase in 2023
According to UK Finance Report

Authorised push payment (APP) fraud is a type of cybercrime in which scammers use social engineering techniques such as impersonation and manipulation to convince victims to willingly transfer money to a new payee.

Scammers gain the victim’s trust by posing as a lawyer, accountant, friend, family member, romantic partner, or business associate, among other things. Using manipulative tactics and deceit, they persuade their targets to transfer money from their bank accounts urgently or regularly.

As the transfer is instantaneous, the scammer is able to move the money straight away, into a second, often overseas, account, by which time it is virtually impossible to recover, and the victim may have lost thousands.

Headlines from the most recent fraud report, based on data from UK Finance’s 300 member firms, include:

• £1.7 billion lost to fraud in 2023, a 4% decrease on the previous year, across a total of 2.9 million cases
• The total lost to authorised push payment fraud fell by 5% to £459.7 million, but the total number of cases increased by 12% to 232,429, the highest since 2020
• Purchase (+34%), romance (+14%), and investment (+1%) scams all saw cases increase since 2022
• Romance scams saw the highest increase in total loss (£35.5m) and number of cases (4,160) since 2020
• Impersonation APP scam cases fell by 17%

While purchase, romance, and investment scams were the types that saw increases in number, victims still lost a significant amount of money to other types of APP scams, even though the numbers fell slightly, including:

• Advance fee scams
• Invoice and mandate scams
• CEO scams
• Impersonation scams

The overall loss for APP fraud in 2023 was almost £460 million meaning that, while cases in some areas may be dropping, there is still a staggering amount of money being taken by scammers. Over three-quarters of the cases reported started online and accounted for 16% of the total lost, while 16% of cases originated via telecommunications, e.g. phone calls and text messages, and accounted for almost half (43%) of the total value lost.

Ben Donaldson, Managing Director, Economic Crime at UK Finance, commented in his foreword:

“Fraud in all its forms continues to represent over 40 per cent of reported crime. That is the scale of the challenge we continue to face. Moreover, victims often suffer severe emotional damage as fraud is a pernicious and manipulative crime. We see this through the calls our members have with victims, as well as the harrowing case studies we often read about in the media. It is only by stopping fraud happening in the first place that we will truly protect people.”

If you think you’ve been targeted by any kind of APP scam, including those outlined in the UK Finance report, and have lost money as a result, the first thing to do is report the scam to your bank and Action Fraud, the national reporting centre for fraud.

Your bank will investigate the loss, and, in some cases, you may be refunded. Unfortunately, your bank may also conclude that the scam was not their responsibility and will refuse to refund all or some of the loss, placing the liability with you.

However, given the growing prevalence of APP scams in the UK, as the industry experts, banks have a duty of care to their customers, to prevent scams and fraud from taking place on their accounts. There has been an increasing number of cases in which banks have been found to have failed in this duty, and customers have been compensated.

If you have been targeted by a scam and believe that your bank should have done more to protect you, there are next steps you can take. Disagreements between financial institutions such as banks and their customers can be independently investigated by the government-backed Financial Ombudsman Service (FOS). FOS has the power to apportion liability and make compensation awards, putting fraud victims back in the position they would have been in had the fraud not happened.

Sarah Spruce, Legal Director and Head of the APP Fraud department at TLW Solicitors, commented on the findings:

“While it seems that some types of scam cases are declining, the overall numbers and values are still concerning. This also may not be the full picture, as we know that some victims feel embarrassed or ashamed and do not make a report. So, the real figures may be higher still.

We encourage anyone who has been targeted by an APP scam to come forward and report it. My team can assess your case and make your initial claim to your bank or escalate the matter to FOS if your bank refuses to refund.”