A surge in fraud attacks on consumers since the pandemic has become a ‘national security threat’ for Britain requiring government-coordinated action across industries, banking industry lobby group UK Finance has warned.
Financial fraud has rocketed during the pandemic as more consumers shop online and try digital banking and investing.
Criminals stole 754 million pounds ($1.03 billion) through bank frauds in the first half of this year, up 30 per cent on the same period in 2020, according to a UK Finance report published on Wednesday.
Bank losses from authorised push payment (APP) fraud – where a customer is tricked into a payment by a criminal – also leapt 71 per cent in the first half, overtaking the amount stolen through card fraud for the first time, UK Finance said.
Lenders have been pushing for tougher action on fraud by the government, regulators and other industries including online platforms exploited by fraudsters to target victims, as they grapple with a wave of increasingly sophisticated attacks.
The report found 70 per cent of APP scams originated on an online platform and also found an increase in online adverts targeting people as young as 14 to become “money mules” for illicit funds.
The findings come ahead of a grilling of bosses from Facebook (FB.O), Alphabet Inc’s (GOOGL.O) Google, Amazon (AMZN.O) and eBay (EBAY.O) on their efforts to combat economic crime by British lawmakers on the Treasury Select Committee later on Wednesday.
UK Finance called for government-coordinated action across sectors and for all economic crime to be covered by a planned Online Safety Bill, which currently excludes online advertisements.
“The level of fraud in the UK is such that it is now a national security threat,” Katy Worobec, managing director for economic crime at UK Finance said in the report. “The banking sector cannot solve this on its own.”
Bank security systems managed to prevent 736 million pounds from being stolen by fraudsters over the six month period, the report said.
Watchdog the Financial Conduct Authority said last week that consumers lost nearly 570 million pounds to investment fraud alone in the financial year to April – a sum that had tripled since 2018.