Laura Suter, head of personal finance at AJ Bell, comments on UK Finance’s fraud report for the first half of 2023:
“So-called authorised push payment fraud has hit its highest levels on record, with the number of cases rising by 22% in the past year. More than 116,000 cases were recorded in the first half of this year, as scammers ramped up their efforts. However, the silver lining to this is that the amount returned to victims hit its highest rate. Of the money lost, 64p in the £1 was returned to victims, following the introduction of the voluntary code of conduct introduced by the industry, but it remains that a third of losses are not reimbursed and have to be footed by the individual.
“Investment fraud numbers have dropped slightly from last year and losses have fallen dramatically from their Covid-era highs, yet these scams still make up almost a quarter of authorised push payment fraud. It’s a lucrative area for scammers, as each fraud involves far larger amounts of money when compared to payment scams.
“Investment fraud is also most likely to be life changing, with people being scammed out of significant sums or even their entire life savings. In an era of high interest rates on cash, these scams that promise guaranteed high returns can look more legitimate. However, more people engaging with their finances and being cautious with their money in a cost of living crisis might help to avert some fraud.
“Ultimately much of this fraud spreads on social media, with the ease of generating accounts and posts meaning scammers can cast their net far wider. The speed at which a scammer can contact hundreds of people via social media, in comparison to scams where the fraudster has to call up each individual, means that more people can be targeted.
“These figures all have to be taken with a pinch of salt – as we know that the official fraud stats are the tip of the iceberg when it comes to the true scale of fraud in the UK. So often people feel embarrassed or ashamed of being defrauded and therefore don’t report it, while others assume that nothing can be done to get their money back, so it goes unreported. Anyone who has been the victim of fraud should contact Action Fraud and their bank, as they may be able to get their money back.”
