More than one in ten people in the U.K. (12.1 per cent) have fallen victim to payments fraud in the last four years, according to new research by global payments company ACI Worldwide. The report shows that online fraud and digital wallet hacks now account for nearly 20 per cent (19.8 per cent) of UK fraud cases, while the number of those falling victim to confidence tricks has increased to 12.8 per cent of all fraud cases.
The findings highlight that new kinds of fraud, including digital account hacking, social engineering and identity theft have reached pandemic levels in the U.K.
UK Finance recently revealed that British fraud victims lost £1.3 billion in 2021 alone amid a surge in online fraud, with a near 40 per cent rise in authorised push payment (APP) scams. APP scams involve fraudsters tricking their victims into willingly making large bank transfers to them, in many cases via social media networks or unsolicited telephone calls. The study reveals similar trends across Europe and globally.
“As more consumers rely on digital and real-time payments, fraudsters are increasingly targeting the online space to steal sensitive information and top up any missing pieces by impersonating well-known organisations such as banks or government bodies. The advent of open banking and decentralised financial services offers additional room for the problem to grow,” said Jackie Barwell, director – fraud product management, ACI Worldwide.
She added, “A radical rethink of fraud fighting strategies and industry-wide collaboration is required to bring the situation under control. It is an issue that banks cannot solve on their own any longer. Financial service providers, social media giants, telco companies and enforcement agencies all need to work together to stop fraudsters in their tracks before the fraudulent transactions take place. The answer to fighting fraud will not be found by working in isolation.”
ACI’s report reveals similar trends in Europe and globally. In France, 13 per cent of the population have reported being a victim of fraud in the last four years, and cases of confidence trickery increased to 11.5 per cent. In Italy, 11.7 per cent of the population has fallen victim to fraud and social engineering now accounts for 15.7 per cent of all fraud cases.
In India, which has one of the most developed real-time and digitally advanced payments systems, confidence trickery increased to 13.7 per cent of all fraud cases in 2021, with 41 per cent of the population falling victim to fraud in the last four years.
“Banks need to wake up to the fact that, while they need to use their most advanced technology to monitor outgoing transactions, the same needs to be done for incoming payments to detect mule and fraudulent accounts,” said Cleber Martins, head of payments intelligence and risk solutions, ACI Worldwide.
“We must see increased accountability at the receiving end and enhanced data sharing among all participants in the ecosystem – without breaching privacy regulations. As fraudsters are becoming more advanced, a detailed and holistic view of all payments activity is essential to containing them,” he added.