As ever the UK Finance fraud loss figures make for interesting reading. There have been a number of changes in the last year with some clearly positive signs yet with some worrying trends. The key points are:

· Overall fraud loss by value down 4% to £1.17bn

· Unauthorised Fraud prevention up 7% to £1.2bn

· Unauthorised fraud by value down 3% to £708.7m

· Authorised Push Payment (APP) fraud losses down 5% to £459.7m

This year’s figures show a further downward trend in losses which is good news, even if over £1bn of fraud in a year is still too high. However, for APP case volumes are still up, reflecting changes to the MO’s and average values as fraudsters pivot around controls.

What does the more detailed data tell us?

There are three main areas of fraud (Ex Cheques) in the UK report, so let’s cover those in turn.

Card Fraud (Unauthorised)

· Card Fraud down 1% to £551m second lowest in last 10 years (only 2021 during covid is lower)

· Fraud to turnover ratio (bps) has continued to decline to 5.8bps as card usage has increased.

· Prevention up 4% to £1.017bn

· Card ID Theft up 53% with ACTO up 85%

· Card Not Received down 24%

· Remote Purchase down 9%

Very positive trends on CNP, showing the SCA investments have paid off. However, it is still a game of whack amole as the fraudster move to easier pickings. Card ID theft, and particularly account takeover of existing accounts is skyrocketing. Data Compromises, along with social engineering is letting fraudsters take over accounts and once into the account, losses are higher.

Remote Banking Fraud (Unauthorised)

· Total remote banking fraud £151.8m down 7% with cases down 21% to 37,412

· Internet channels losses down 22% to £88.7m while mobile up 33% to £45.5m

· Telephone banking up 9% to £17.6m

· Prevention up 25% to £218m

The key thing here is migration between channels as genuine customer usage changes toward mobile. Prevention continues to improve as investments pay off with 58% prevented by volume and cases reducing.

APP Fraud (Authorised)

· Total Losses down 5% yet cases up 12% to 232,429

· Personal down 8% by value and cases up 12%

· Non-Personal up 8% to £83.3m and cases up 15%

· Romance and purchase scams driving Losses up 17% & 28% respectively

· Investment Scams down 5% and the lowest since 2020, CEO down 14% by value and case down 5% to 411

Positive news on APP, but far from winning the war. With cases still increasing average fraud values are dropping as some types are industrialised.

What are the interesting nuggets from the numbers?

The levels of ACTO in cards ID theft shows that data compromise is a key enabler. This will largely be from non-financial firms that need to up their security game. Social media continues to be a key enabler as shown by the increasing romance and purchase scams in APP. The level of fraud originating online is huge at 76% of APP cases, with telco at 16%.

As the liability shift for scams and authorised frauds moves to the beneficiary PSPs in the UK, the next stage will be for the big tech firms to contribute more to resolve the problems, both in terms of prevention and restitution.

With £611m going to mule accounts, the vast majority of which are UK based domestic accounts, more action is required on mules.

On October 7th the new PSR rules come into force which will require much higher level of re-imbursement and liability on the receiving PSP.

Many PSPs especially the big UK banks will have already moved to this ahead of time, at least in terms of controls even if they are not yet taking liability in all cases. Therefore, we may see some of these changes in 2024 numbers, but 2025 will be the first big shift.

Further improvements must be made:

· Improved fraud reporting for victims, quicker and easier, including law enforcement reporting

· Increased public private data sharing to aid both prevention and disruption

· Improving freezing of funds and inbound payment profiling to prevent further onward transmission of funds

· Improvements to onboarding processes to prevent new mules entering PSPs

CYBERA supports all of these areas:

– As victim reporting increases in importance and speed due to the PSR changes, CYBERA’s platform allows easy and quick reporting, plus automation of law enforcement reporting.

– CYBERA’s tools can help in the claims investigation process and whether a refund should be processed.

– CYBERA provides intelligence on mule accounts globally from multiple sources, not previously shared.

– Sharing those significantly increases mule detection as mule bank accounts are not closed immediately.

– Mule intelligence supports detection throughout the customer lifecycle for maximum prevention.

About CYBERA

At  CYBERA  we’re on a mission to stop money laundering and help protect customers from scams and other financial cybercrime. We close gaps that allow cyber criminals to thrive by sharing crime data in real-time with financial institutions, fintech, and crypto exchanges, and coordinating a global response to support customers who have become victims of financial cybercrime.  

CYBERA WATCHLIST™ helps support firms to reduce fraud and money laundering and meet regulatory requirements as part of a holistic fraud and financial crime strategy.  

Financial Institutions (FIs) can check against the CYBERA WATCHLIST™ for confirmed mule accounts when processing payments. For outbound & inbound payments, where there is a match on either IBAN (Account Number & Sort code) or on Name the transaction can be flagged as high risk.  

At account opening and ongoing CDD, email, phone and name can be used to match to CYBERCRIME WATCHLIST™ to reduce opening new mule accounts.  

CYBERA VSR™ further supports by providing users with alerts of any of their accounts reported as mules directly in their dashboard.