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Warning: financial fraud is on the rise

Warning: financial fraud is on the rise

Category: Money

Updated: 18/03/2016
First Published: 18/03/2016

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Many of us think that we couldn't possibly be scammed by fraudsters, but unfortunately, with technology often playing a vital role, it may not be as easy to spot as you may think – and financial fraud is on the rise as a result.

Deception scams drive increase in financial fraud

New figures from Financial Fraud Action UK (FFA UK) show that financial fraud losses totalled £755 million in 2015, a 26% increase on the previous year, highlighting how important it is to remain vigilant.

This can be broken down into £567.5m in fraud losses on UK payment cards (up 18% from 2014) while cheque fraud losses totalled £18.9m, a 6% fall year-on-year. However, remote banking fraud saw the largest rise of 72%, with losses totalling £168.6m for the year.

Much of the increase in fraud cases has been driven by impersonation and deception scams, the report noted, but as the figures indicate, growth in sophisticated online attacks (such as data breaches and malware) is also on the rise – which shows the importance of protecting personal information.

Happily, the figures also revealed that bank and card company security systems detected and prevented a total of £1.76bn of fraud from occurring in 2015 – equivalent to £7 in £10 of potential fraud being stopped. However, while this level of prevention is undeniably welcome, it's no reason to let your guard down.

"Banks work extremely hard to protect their customers, using highly sophisticated security systems that stopped 70% of attempted fraud from occurring last year," said Katy Worobec, director of Financial Fraud Action UK. "Any increase in fraud is unwelcome, but the industry is continually evolving its response to fraud as it develops.

"[However], with the continued rise in impersonation scams and data breaches, it's vital that all customers are alert to the dangers. 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."

Be vigilant

The rise in impersonation and deception scams could be particularly worrying from a consumer perspective, as here, the onus is on them to be alert to the fraud. In these cases, criminals will typically approach customers claiming to be from a trusted organisation (such as a bank, a utility company, or even the police or a Government department) and will attempt to obtain personal and financial details that will then be used to commit fraud.

These scams often involve a phone call, text message or email claiming there has been suspicious activity on a customer's account or that their account details need to be 'updated' or 'verified', and in some cases the fraudsters even try to trick people into transferring money directly to them.

This is why it's so important to be vigilant of any unsolicited phone calls, text messages and emails, and never give out any personal and security information unless absolutely sure you know who you're dealing with. Even then, you shouldn't go too far – remember that your bank or the police will never call to ask for your online banking passwords or 4-digit card PIN, so never give these details out.

Tony Blake, senior fraud prevention officer for the Dedicated Card and Payment Crime Unit, has this advice: "Criminals will do all they can to make their approach seem genuine, but don't take someone at their word – people aren't always who they claim to be, even if they know a bit of information about you already.

"If you receive a call, text or email out of the blue asking for your personal information, hang up the phone and do not reply directly. Instead, wait five minutes and ring your bank to alert them to the scam, using a phone number that you trust – such as the one on the back of your bank card or from the official website."

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.