UK banks urged to beef up anti-fraud systems for international payments

The Guardian

2 days ago

UK banks and payment firms have been urged to strengthen their anti-fraud systems for international payments after a rise in scammers tricking people into sending money abroad.
After years of horror stories about people losing huge sums through bank transfer scams, rules came into force last October requiring UK banks and other payment firms to refund those who have been manipulated into sending money to criminals. This week, industry data revealed that the number of cases of this type of crime had fallen to its lowest level for five years.
The frauds are known as authorised push payment (APP) scams. The number of cases fell by 20% last year to just under 186,000, said the banking body UK Finance, which issued the data. In 2023, there were more than 232,000 cases. The decrease is thought to be down in part to the new rules, plus other initiatives and greater awareness.
But the figures came with some stings in the tail. While the number of cases fell substantially, the total amount lost to APP fraud decreased by just 2% to £450m. In other words, as UK Finance put it, 'fewer people are handing over bigger sums of money'.
There was also a 'notable increase' in APP scams involving international payments, in which criminals trick people into sending money outside the UK. This is not covered by the new rules, which apply to money that is moved from one UK bank account to another.
This week's data revealed that international payments accounted for 11% of APP scam losses in 2024 – almost double the 2023 figure.
Rocio Concha, the director of policy and advocacy at Which?, said: 'Fraudsters are constantly evolving their tactics, so it is disheartening but unsurprising to see a rise in the number of cases in which scammers trick their victims into sending money abroad.'
As these payments are not covered, the victims are very unlikely to get their money back.
'Banks and payment firms should enhance their anti-fraud controls for international payments, and the independent review of the mandatory reimbursement scheme in October should take note of these emerging trends,' said Concha.
Most of the APP frauds reported last year (71%) were purchase scams, in which the victim hands over money for goods or services – perhaps a car, a mobile phone or gig tickets – that either do not exist or never arrive.
When it comes to the total amount of money lost, investment scams dominate. Typically, the criminal convinces victims to move their money to a fictitious fund or pay for a fake investment. Cryptocurrencies often feature heavily. More than £144m was stolen via this type of APP fraud in 2024 – up 34% on 2023, despite a sizeable fall in the number of cases.
UK Finance is itself not immune to being targeted by scammers. This week there was a prominent warning on its website saying: 'We are aware of a potential scam involving people being offered loans for an upfront fee by an individual posing as a representative of UK Finance.' The organisation doesn't offer any financial products, 'and anyone claiming to provide such products on our behalf is fraudulent,' it said.
Meanwhile, the payments firm Visa this week revealed four fraud tactics that it said had been gaining ground across the UK and Europe in recent months. They are:
Fraudsters offer high-value goods – such as exercise machines – at low prices. Shoppers are tricked into handing over the one-time passcode banks send customers to authorise transactions. These are then used by criminals to carry out fraud.
Fake apps impersonating trusted organisations are stealing personal and financial data.
Scammers get hold of people's card details via phishing and then link these to criminal-controlled digital wallets. They then use software that allows them to make contactless payments using these details remotely from anywhere in the world.
Generative artificial intelligence is increasingly being used to create convincing fake IDs and open fraudulent accounts.