Irish News

Huge cost of fraud too great to ignore

Gareth Barton
By:
Gareth Barton
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Fraud is costing business and individuals in the UK millions of pounds annually – with fraudsters stealing a total of £609.8m in the first six months of this year alone.
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The figures contained in a UK Finance report, are worth considering, in this International Fraud Awareness Week 2022, as we take stock and consider what type of frauds have been occurring and what you can do to help prevent yourself becoming a victim.

Fraudsters always look to exploit situations where people are concerned about their finances, as was seen early on in the Covid-19 pandemic.

As more people are on the lookout for opportunities to make some extra money to combat the increased cost of living, this could leave you more susceptible to fraud, and therefore, we as individuals, employees and employers, are being urged to be extra vigilant.

UK Finance’s 2022 half-year fraud update examined ‘unauthorised’ and ‘authorised’ frauds and scams.

Unauthorised transactions are instances where the account holder themselves do not provide authorisation and the transaction is carried out by a fraudster (for example, the victim’s card details are used without their knowledge or consent).  

Victims of unauthorised payment card fraud are legally protected against losses. UK Finance also indicate that industry analysis has shown customers are refunded in excess of 98 per cent of all confirmed cases.  

Authorised transactions, commonly referred to as Authorised Push Payments (APP) are instances where the victim is tricked into authorising a payment to an account controlled by a fraudster.  

In the first half of 2022, APP fraud losses continued to be driven by the abuse of online platforms used by fraudsters to scam their victims. These include investment scams advertised on search engines and social media, romance scams committed via online dating platforms, and purchase scams promoted through auction websites.

Fraudsters used scam phone calls, text messages, and emails, as well as fake websites and social media posts, to trick people into handing over personal details and passwords. They subsequently used this information to convince people into authorising a payment.  

In the UK there were 95,219 incidents of APP scams in H1 2022, with gross losses of £249.1 million. This total includes £90.5 million lost to impersonation fraud. This is where fraudsters convince people to make a payment or give their personal and financial details to someone claiming to be from a trusted organisation such as a bank, government organisation, or energy company. This was the largest category of APP losses in the first half of this year.

One specific type of impersonation scam that has come to light recently capitalises on the government’s energy grants currently being rolled out.

As the cost of living and in particular energy bills rise, fraudsters are seeking to take advantage of unsuspecting consumers. Their latest ploy involves sending malicious text message/email links that ask you to sign up for the government’s energy grants. These links then prompt you to enter your bank details in order to receive such grants.

In the UK, there is currently no need to apply for such grants, with most customers receiving the support automatically through their energy bill, however fraudsters are taking a topical event and preying on the most vulnerable, luring them in with the promise of extra income.

Whilst each scam is different and becoming increasingly tailored to real world events and pressures, there are a few key principles, highlighted by the ‘Take Five to Stop Fraud’ campaign, that should be embedded in everyone’s everyday actions.

Stop – Taking a moment to stop and think before parting with your money or information could keep you safe.

Challenge – Could it be fake? It is okay to reject, refuse, or ignore any requests. Only criminals will try to rush or panic you.

Protect – Contact your bank immediately if you think that you have fallen for a scam and report it to Action Fraud.

By being aware, you can prevent fraud, saving yourself or your business from potentially costly consequences.