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Banks urged to ‘step up’ as fraudsters steal £500m from UK customers

£145 million was lost through scams which dupe account holders into transferring money.

Scammers stole more than £500 million from UK bank customers in the first half of 2018, figures have shown.

A total of £145 million of that was lost through authorised push payment (APP) scams, where people are duped into authorising a payment to another account, trade body UK Finance said.

The remaining £358 million was lost due to unauthorised fraud, where the transaction is carried out by a third party and is not authorised by the account holder.

In most cases, victims of unauthorised fraud receive a full refund, but those duped by APP scams currently have no legal protection to cover them for losses.

UK Finance said £30.9 million of the £145 million lost through APP scams this year had been returned to customers.

The most prevalent type of APP scams – accounting for almost two-thirds of reported cases in the first six months of the year – were purchase scams, where victims pay in advance for a product or service, such as a car or a holiday rental, which is not received or does not exist.

This type of fraud often takes place online, through auction websites or social media.

There were also 3,866 reported cases of impersonation scams, where the criminal claims to be from the police, bank or another organisation in order to trick the victim into transferring money.

The nature of these scams means victims are often persuaded to transfer significant sums of money, with the average loss in police and bank impersonation fraud amounting to £11,402.

Katy Worobec, managing director of economic crime at UK Finance, said the figures showed scams posed a “major threat” to the UK.

“The criminals behind it target their victims indiscriminately and the proceeds go on to fund terrorism, people smuggling and drug trafficking, whether or not the individual is refunded,” she said.

The criminals behind it target their victims indiscriminately Katy Worobec, UK Finance

She added that the industry was taking action to tackle the problem, by investing in security systems and cyber defences, as well as bringing in new standards to ensure victims get support from their payment providers.

The organisation said financial institutions had prevented two-thirds of unauthorised fraud in the first half of 2018.

But Gareth Shaw, money expert at consumer group Which?, said banks’ efforts had been “woefully insufficient”.

“It’s now two years since our super-complaint highlighted the lack of protection for victims of bank transfer scams, but these shocking figures show just how widespread the problem still is,” he said.

“Banks… have not done enough to protect their customers, who continue to lose life-changing sums of money to ever-more sophisticated crooks.

“The Payment Systems Regulator has rightly committed to introducing a reimbursement scheme for victims. It’s about time that banks step up and properly compensate customers who have lost money through no fault of their own.”

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