A record amount was lost to purchase scams in 2023, where people were tricked into paying for goods that never materialised, UK Finance said
Purchase scams and romance frauds pushed up the number of cases where people were tricked into losing money to fraudsters last year, as per a trade association.
A record amount was lost to purchase scams in 2023, where people were tricked into paying for goods that never materialised, UK Finance said.
It also cautioned that people looking to attend events such as the Olympics and Taylor Swift concerts could be targeted by scammers this year.
Around 156,000 purchase scam cases were recorded, with a total loss of £85.9 million, marking the highest loss and case total recorded by the organisation, which represents the banking and finance industry.
Purchase scams account for nearly two-thirds (67%) of the total number of authorised push payment (APP) cases – where someone is tricked into transferring money to a fraudster.
With a purchase scam, the victim pays in advance for goods or services that are never received, often ordered on an online platform like an auction website or social media.
Lloyds Bank recently estimated that, based on analysis of its own scam reports, over £1 million could already have been lost in the UK to fraudsters pretending to offer Taylor Swift concert tickets.
Asked about events that scammers could take advantage of, Ben Donaldson, MD, economic crime at UK Finance told journalists: Every year we see a cycle of scams changing throughout the year.
I think the Olympics and Taylor Swift are probably the two biggest ones for this year, he added.
UK Finance’s report said: It is perhaps assumed that purchase scams only involve high volumes of lower value ‘too good to be true’ scams.
But UK Finance said that data from members of a voluntary reimbursement code suggests nearly 9% of cases and two-thirds of losses involving purchases with a value in excess of £1,000.
The total number of authorised push payment cases climbed by 12% annually last year to 232,429.
APP fraud losses totalled £459.7 million, down by 5% compared with the previous year. This was made up of £376.4 million of personal losses and £83.3 million of business losses.
UK Finance’s authorised push payment scam records go back to 2020.
Romance scams, where victims are tricked into believing they are in a relationship, also reached a high, with £36.5 million lost this way, as per UK Finance.
Nevertheless, authorised push payment scams losses where people were tricked by criminals impersonating the bank or the police to convince someone to transfer money to a “safe account” dropped.
UK Finance said there has been significant investment made in warning consumers that a bank will never ask someone to transfer money in this way.
Around 62% or £287.3 million of authorised push payment fraud losses was returned to victims in 2023, marginally up from 59% in 2022.
The report said: One area of APP fraud to watch in the coming year is the evolution of losses across investment scams.
It said that while losses through investment scams had declined over the last two years, this may reflect cost-of-living challenges.
The report added: As these pressures are expected to dissipate in 2024 with growing real incomes, the risk of losses through investment scams could rise.