As a society we cannot seem to catch a break. We have had the relief of coming out of a global pandemic and various lockdowns. But now we have a cost-of-living crisis, a recession looming, and are facing an epidemic of fraud. Times cannot be tougher. Energy bills are on the rise, along with fuel and food prices. Fraudsters are preying on us when stress and worry is at its peak. Financial uncertainty is already plaguing households nationwide and now we must look over our shoulders for these assailants lurking in shadows. They lurk in our inboxes, on our social feeds, and within our text messages. A crime we don’t see coming as the perpetrators hide behind their screens.
With this increase in fraud and scams there has been a response of pressure by backbenchers for the government to do more to protect our bank accounts. The hope being that the government swoops in and puts a halt to the fraud epidemic.
APP (Authorised push payments) fraud is on the rise. 2021 saw a surge of victims tricked into making payments, with £1.3 billion stolen using APP fraud. This translates to around 195,996 victims, up 27% from the previous year. A staggering number, representing a group of people who have had their savings ripped away from them at a time when they need them most.
The Many Faces of APP Fraud
APP Fraud has many disguises to hide behind. We have summarised types of APP scams for you to look out for:
This method makes up nearly 40% of APP losses. Criminals pretend to be trusted individuals or representatives of an authoritative organisation. Victims are tricked into moving their money with £214.8 million stolen in 2021 using this method. Fraudsters have impersonated the NHS, Banks, and Government departments via phone calls, texts, emails, fake websites, and social media posts. This method of defrauding allows the criminals to tailor their tactics around current events. For example, during the pandemic there were NHS Track and Trace scams. This has now morphed into messages impersonating the local council getting in touch with the promise of giving a £150 council tax rebate amidst the cost-of-living crisis. These criminals latch onto the universal fears of a society and exploit their victims in a way they know appears legitimate as they align with current events.
This was the second largest category of APP fraud losses in 2021. This category saw a 57% increase compared to 2020, translating to £171.1 million stolen.
This scam involves being tricked into purchasing something that does not exist. This type of fraud is the most common. Compared to 2020, 2021 saw an 18% increase, with 99,733 cases and losses hitting a total of £64.1 million.
Thanks to the Netflix documentary Tinder Swindler, this type of APP fraud has been exposed to the masses. It follows women who have been tricked into sending large sums of money to their boyfriend who then vanishes taking the cash with him. Romance scams skyrocketed in 2021, increasing by 73% and stealing £30.9 million from the victims.
This type of APP fraud grew the most regarding losses in 2021. There were 461 cases which was a 29% jump compared to 2020 with losses increasing 165% to £12.7 million. CEO fraud involves scammers sending an email to the business account departments posing as senior members of staff urging a payment to be made to a supplier or partner. The increase in 2021 could be due to more people working from home in the pandemic and communicating with colleagues via email. These factors combined may have allowed for these emails to slip through the cracks.
With all these scams taking millions from victims across the country, you would assume there are measures in place to retrieve people’s funds and arrest the perpetrators? Well, no not exactly. UK Finance reported £217.2 million was returned to victims of APP scams. This statistic is appalling as it only accounts for 47% of total losses.
Fraud is swept under the carpet, forming a mound that can no longer be ignored. With only 1 in 1,000 reported cases solved by the police. The Telegraph reported on the increasing in fraud stating: ‘Fewer than a tenth of the 5 million frauds recorded by people in the ONS crime survey are reported to police, largely because people are either ashamed of being scammed or believe it is such a low priority crime for forces that it is unlikely to be investigated’. Looking at the low success rates of solving fraud cases, it is unsurprising that people view reporting as a lost cause.
Companies Urged to Do More in this War on Fraud
The response to this increase of scams has been, to put it lightly, abysmal. People are still losing their savings, wages, and pensions. It isn’t good enough that in an age of technological advances more hasn’t been done. A quick message on online banking apps before you transfer money is not cutting it. We need the government, banks, and other institutions to help us. The call to action is for companies to protect its customers. Katy Worobec, the managing director of economic crime at UK Finance said, “we continue to call for other sectors to play a greater role in helping protect customers from the scourge of fraud.”
Society Called, UTP Answered
Early in 2021, before these increased statistics of fraud were released, UTP was already on the case. We wanted to do our bit to protect our customers from financial losses from fraud and chargebacks. UTP puts its merchants first so wanted to ensure local businesses don’t suffer from fraudulent transactions. That’s why we created the UTP Shield, the perfect armour to take into this battle against scammers.
It is a free software provided to all our customers to help protect from potential fraud and chargebacks. This software works by an algorithm detecting potentially fraudulent card transactions and notifying the merchant via text and email. These alerts inform them of the risk level of these transactions which then allows merchants to place the goods on hold to high-risk buyers. UTP Shield gets to know your business including creating a profile of trading hours, methods or payment accepted and the location of customers. This then enables the software to flag suspicious transactions with a high level of accuracy, while operating 24/7. UTP are currently the only payment provider to offer such a high degree of security to its customers and we pride ourselves on providing our merchants with the highest degree of anti-fraud protection. The service is entirely free, and customers can opt-out of notifications at any time.
Our merchants come first, hence why we had UTP Shield in the works before its release. We saw a problem, so we created an answer.
Mark Shelford, the lead police commissioner for economic and cybercrime recently released a quote with the Financial Times. When discussing fraud, he argued “The most cost-effective way of fighting fraud was through education.”
We’ve compiled a few ways to help protect yourself from being a victim of fraud:
- Stop and Think: Scammers try to create a sense of urgency in their methods, forcing you to act before you have time to reflect and question the situation you are in. Pausing briefly will give you time to identify a fraudster.
- Attention to detail: Fraudulent texts and emails may include spelling or grammatical mistakes, look out for them. Legitimate messages from companies are likely to be a template that has had to be approved. This means it is unlikely there will be any errors in legitimate texts/emails. Additionally, have a look at the email address they are coming from. Ask yourself whether they look like emails from a government email address. It is worth knowing your bank will not call you and ask you to move money into a new account. If you get a call to this effect, it is a scam.
If it seems too good to be true it probably is: If you see a post on social media that promises a large return by investing your money, if you think it sounds too promising with little negatives, it is likely to be a scam.
- Check security: Use Get Safe Online’s website to check out whether a page is likely to be legitimate. Also, if you’re making a payment online, ensure the padlock symbol is at the beginning of the URL.
- Ignore Links: If you get a text which claims to be associated with your bank and asks you to click a link, don’t. Go to their official site or your online banking and check whether there are any alerts in your messages. You can even ring the number on the official website to query the message you have been sent.
- Call back: If you get a phone call that you’re not 100% sure is legitimate, hang up. Find the official phone number online and call back to check whether the inquiry is genuine.
- Check security settings: Ensure your passwords are strong and not utilised on multiple accounts. By repeating, you’re creating a master key to unlock all your accounts by doing this. If you’re using a name, is this something that could be found out from a quick browse on social media?
Make yourself aware of the signs to look out for. Free awareness training can be found online at friendsagainstscams.org.uk.