Stopping Banking Fraud: Understanding Scams and the Fight Against Them in the UK

 This episode explores the significant issue of banking fraud in the UK. We'll cover the two main types: unauthorised fraud, where criminals make payments without permission, and authorised push payment (APP) fraud, where victims are tricked into sending money themselves. Learn about the scale of losses – £1.2 billion stolen in 2023. We'll discuss how law enforcement and the government are working to tackle fraud, including criticisms of past efforts. Crucially, we examine the banking industry's role and recent changes like mandatory reimbursement for APP fraud victims.

Key Takeaways

• Criminals stole £1.2 billion through banking fraud and scams in 2023.
• Fraud accounted for over 40% of crimes against individuals in England and Wales in 2024.
• Unauthorised fraud involves payments made without the account holder's permission. Payment providers almost always reimburse victims.
• Authorised Push Payment (APP) fraud is where a victim is tricked into sending money.
• From October 2024, payment service providers are legally required to reimburse APP fraud victims up to £85,000, subject to conditions.
• The police response to fraud has been criticised, with a low percentage of reported cases leading to investigation.
• The government published a Fraud Strategy in 2023 aiming to stop fraud, pursue criminals, and help victims.
• Banking industry actions include the Banking Protocol scheme, sharing intelligence with police, and implementing Confirmation of Payee.

Important Definitions and Concepts

• Authorised Push Payment (APP) Fraud: Occurs when a victim is tricked into sending money directly from their account to an account controlled by a criminal.
• Action Fraud: The national reporting centre for fraud in England, Wales, and Northern Ireland, which collects reports before they are analysed by the National Fraud Intelligence Bureau (NFIB).

Source: Banking fraud
Research Briefing
19 May, 2025

Transcript

SPEAKER_01: 0:00

Hello and welcome to The Bench Report. You're listening to Amy and Ivan. Today, we're looking into a topic that unfortunately affects far too many people banking fraud. We've got various reports and briefings here.

SPEAKER_00: 0:13

Indeed. And our aim is to understand, you know, how widespread this is, the real impact it has and what's being done about it by the authorities and the banks themselves.

SPEAKER_01: 0:23

It's definitely critical. These sources really highlight that it's not just about the money lost, is it? There's a significant emotional toll, too.

SPEAKER_00: 0:30

Exactly. It gives you a view from sort of the ground level right up to the national strategies.

SPEAKER_01: 0:35

So let's start with the scale. The figures from the industry are quite stark.£1.2 billion stolen through fraud and scams in 2023 alone.

SPEAKER_00: 0:46

And it's become such a dominant part of crime overall. The data for England and Wales in 2024 suggests fraud was, what, over 40% of crimes against individuals?

SPEAKER_01: 0:55

40%. That's huge.

SPEAKER_00: 0:56

It is. And if you add in the emotional harm, the cost of investigations, the total impact is estimated at more than double the actual cash stolen.

SPEAKER_01: 1:05

a much bigger issue than just the financials then. The report seemed to split it into two main types. First, unauthorized fraud.

SPEAKER_00: 1:13

Yes. That's the one people perhaps think of first. Someone gets your card details, accesses your account without you knowing. Right. That accounted for$709 million in losses in 2023. The upside for victims generally is banks almost always pay that back. Okay. Common types are remote purchase fraud, online shopping, and card ID theft. And that increase in card ID theft is interesting. How so? It suggests criminals are focusing more on tricking individuals, seeing us as the weakest link, perhaps, rather than just trying to breach bank security systems directly.

SPEAKER_01: 1:46

Hmm. Targeting the person. And the other type that feels especially manipulative. Authorized push payment or APP fraud?

SPEAKER_00: 1:54

Yes, APP fraud. That's where you're tricked maybe by an impersonator or a fake website into sending money yourself to a criminal's account.

SPEAKER_01: 2:01

And the loss is there.

SPEAKER_00: 2:02

$460 million in 2023. Common scams include things like purchase fraud, paying for goods that never show up, or impersonation scams.

SPEAKER_01: 2:10

People pretending to be the police or bank staff.

SPEAKER_00: 2:13

Or even family members. Plus investment scams, romance fraud, and losses from those purchase scams in particular have really shot up since 2020.

SPEAKER_01: 2:23

So with all this going on, how does the system actually respond when someone reports fraud in England, Wales, Northern Ireland. It goes to action fraud. Then the National Fraud Intelligence Bureau, the NFIB.

SPEAKER_00: 2:37

That's the process. But the sources we've looked at are pretty critical. Lots of complaints about poor service, really long delays in handling reports, cases not getting allocated quickly.

SPEAKER_01: 2:47

It even got that nickname, inaction fraud.

SPEAKER_00: 2:50

Which tells you a lot about victim frustration, doesn't it?

SPEAKER_01: 2:53

Certainly does. Is anything changing on that front?

SPEAKER_00: 2:55

Well, they are bringing in a new reporting system. It's meant to be a state of the art, improve the experience speed things up. But its full implementation is ongoing through 2025, which is later than they first planned. So it's still very much a work in progress.

SPEAKER_01: 3:09

OK, so the reporting side is changing slowly. What about the police response? Generally, most cases end up with local forces, right?

SPEAKER_00: 3:16

They do. And the criticism they're often highlighted in these reports is that fraud just doesn't seem to be treated as a high priority compared to other crimes.

SPEAKER_01: 3:24

Leading to?

SPEAKER_00: 3:25

Not enough resources, not enough specialist skills to investigate complex fraud cases effectively. There's a statistic for the year ending March 2024. Only around 2% of fraud offenses recorded by police in England and Wales actually got referred to the local territorial forces for investigation.

SPEAKER_01: 3:45

2%. That's incredibly low given the scale we talked about.

SPEAKER_00: 3:48

It starkly shows a bottleneck, doesn't it? And it fuels the debate found in the sources. Should the local forces handle this or do we need more dedicated regional or national teams?

SPEAKER_01: 3:57

Different views on that, I imagine.

SPEAKER_00: 3:59

Yes. It really gets to the heart of trying to police a digital, often international crime using structures built for, well, more traditional offenses.

SPEAKER_01: 4:11

Although, what's the government doing about these systemic issues? The 2023 fraud strategy comes up a lot.

SPEAKER_00: 4:16

It does. Key actions include setting up a new national fraud squad, over 400 posts planned, and making fraud an explicit priority for the police.

SPEAKER_01: 4:25

And looking beyond UK borders, too.

SPEAKER_00: 4:27

Yes. Using the UK intelligence community, building international partnerships to go after fraudsters who operate from abroad, plus legislative things like banning sim farms.

SPEAKER_01: 4:39

Those things used for mass scam texts.

SPEAKER_00: 4:41

Exactly. And banning cold calls about financial products, trying to cut off the methods criminals use.

SPEAKER_01: 4:47

A more proactive approach, then.

SPEAKER_00: 4:49

That seems to be the idea, yes. Disrupting the prime before it even happens.

SPEAKER_01: 4:53

Now, the banks and financial institutions themselves, they must have a massive role to play.

SPEAKER_00: 4:58

Absolutely crucial. They have legal duties like filing suspicious activity reports, SARS, if they suspect money laundering, which includes fraud proceeds.

SPEAKER_01: 5:06

Though there's some criticism there, too.

SPEAKER_00: 5:08

The source has mentioned concerns about the sheer volume of of SARS and sometimes the quality, making it hard for law enforcement to actually follow up effectively.

SPEAKER_01: 5:16

But there are some big changes happening to protect customers, especially with that APP fraud we discussed. Confirmation of payee is one.

SPEAKER_00: 5:24

That's a big one. It checks if the name you type in matches the account holder's name before you send money. Most major banks use it now, and it's expanding. Makes it harder for criminals to hide behind fake names.

SPEAKER_01: 5:35

And banks can now hold on to potentially dodgy payments for longer.

SPEAKER_00: 5:38

Yes. From October 2024, they get up to four business days, up from just one, to delay a payment if they suspect fraud. Gives them more time to investigate complex cases and potentially stop the money leaving.

SPEAKER_01: 5:50

And probably the headline change, mandatory reimbursement for APP fraud.

SPEAKER_00: 5:55

This is huge. Also, from October 2024, payment providers must reimburse victims of APP fraud, usually up to£85,000 per claim. It replaces the old voluntary code.

SPEAKER_01: 6:07

Are there exceptions?

SPEAKER_00: 6:08

Yes. If the victim was, say, grossly negligent or was somehow involved in the fraud themselves.

SPEAKER_01: 6:14

Still, that's a major safety net, although the sources mentioned some debate around the 85K limit and how it'll all work in practice.

SPEAKER_00: 6:21

There are some critiques, yes, about the limit being lower than some wanted and concerns about the practicalities of oversight. But it's definitely a significant shift.

SPEAKER_01: 6:29

And there are other bank initiatives, too.

SPEAKER_00: 6:31

Definitely. Things like the banking protocol training staff to spot potential victims and branches. Apparently, it's prevented over$313 million in fraud since 2016. And awareness campaigns like Take 5 to stop fraud.

SPEAKER_01: 6:45

It's not just banks either, is it? Tech and phone companies are involved.

SPEAKER_00: 6:48

Yes, through things like the Online Safety Act and measures like blocking fake UK numbers used in scams, tying back to that SIM farm bad effort. It really needs everyone working together.

SPEAKER_01: 6:59

So if we pull this all together, what we're seeing is banking fraud is a huge evolving problem. There are real challenges in how it's reported and investigated.

SPEAKER_00: 7:09

But equally, there are clear, concerted efforts underway. New strategies, new rules, new squads from government, police and the financial sector aimed at both catching criminals and, crucially, protecting you.

SPEAKER_01: 7:20

And for you listening, what's the key takeaway? I suppose it's understanding these different fraud types, knowing the reporting system is, well, in flux, but also being aware of the new protections, especially that mandatory APP reimbursement.

SPEAKER_00: 7:33

Knowing your rights and how the landscape is changing is vital. Awareness really is the first offense.

SPEAKER_01: 7:38

So a final thought to leave you with. Criminals are always adapting, focusing on tricking individuals, that weakest link idea. How effective can all these system changes be if public awareness and vigilance don't keep pace?

SPEAKER_00: 7:53

And perhaps how might fraudsters try to exploit these new protections, like the reimbursement rules? Could they adapt their scams around those? Something to consider.

SPEAKER_01: 8:02

Thank you for joining us for this look into banking fraud.

SPEAKER_00: 8:04

We hope it's given you some useful insights. Do think about the points we've discussed.

SPEAKER_01: 8:08

As always, find us on social media at BenchReportUK. Get in touch with any topic important to you. Remember, politics is everyone's business. Take care.

SPEAKER_00: 8:16

Thank you.