With technology evolving all the time and the cost-of-living crisis meaning that some are turning to crime to make ends meet, keeping on top of financial fraud is harder than ever.
New figures from UK Finance, the industry body that represents Britain’s banks and financial services companies, show that over £1.2 billion was stolen by fraudsters in 2022. Although that figure is down eight percent on the year before, losses from some types of fraud almost doubled.
Experts at UK Fraud and Feedzai, a financial fraud detection software service that partnered with the trade association to deliver the report, said that although losses were coming down, fraudsters were making it harder for consumers to spot scams.
“Fraudsters adapt and use increasingly sophisticated tactics and technology to fool consumers,” says Daniel Holmes from Feedzai, saying that customers need to be educated to help them avoid being scammed.1
“Rapid changes in technology bring us to a new and critical inflection point in the fraud space”.1
Here are some of the most important things you can do to ensure you aren’t a victim or fraud, and to get your money back if the worst does happen.
Know the danger zones
You might think you understand the dangers of social media, but alongside the issues with misinformation and oversharing, there is also the problem that you might lose your cash to a fraudster.
The type of fraud committed here can include fake social media posts offering discounted goods, where the criminal uses the customer’s stolen card details to purchase the item from a legitimate source and then keeps the payment from the customer.
Social media can also be a source of investment scam adverts while consumers are also approached to transfer fraudulently gained funds for other people – a practice known as ‘money muling’.
Social media is also the home of romance scams, where fraudsters gain the trust of victims hoping for a romantic partnership before taking their money.
Online retailers are also a place where fraud occurs, with digital ‘skimming’ attacks, where a criminals will add malicious code to a website to steal information when a customer completes purchases.
Offline, ‘skimming’ can also take place at cashpoints, where devices can be inserted into the machines or attached to them to record card details. According to the UK Finance report, fraud losses at cash machines rose 7% last year to £26m.2
Know the danger signs
Watch out for the danger signs when you receive messages or requests for cash or details. The UK Finance report shows that fraudsters like to impersonate trusted organisations such as HMRC, your internet service provider, or an e-commerce provider. They may use current affairs to make their requests more plausible, for example asking for details so that you can receive a cost-of-living payment, energy rebate or tax refund.
An offer by a remote service provider to look at your computer is also a danger sign. The criminals will claim to be providing support from an IT service provider and might convince a customer to download remote access applications that can steal data.
If you receive a ‘one time passcode’ by text message and you have not requested one, this is another fraud red flag. UK Finance says that you should immediately contact your bank on a number that you already know to be correct – such as the one listed on your credit or debit card – if this happens.
Know the safety steps
There are many things that you can do to help minimise the likelihood that you will become a fraud victim. Ensure you do the following:
- Report any lost or stolen cards to your bank or card company straight away
- Check bank and credit card statements regularly and if you spot any payments, contact your card company immediately
- Cover your PIN when you enter it
- Do not use any card machines where someone seems to be watching you closely or where the machine seems to have been tampered with
- Use a postal redirection service when moving to a new home to keep your ID safe
- Request copies of your personal credit report from a credit reference agency on a regular basis to check for any entries you don’t recognise.
- Do not give your Pin or full password over the phone if someone contacts you out of the blue. A genuine bank or other organisation will not do this
- Ensure you have the most up-to-date security software installed on your computer, including anti-virus software. Some banks offer their own free versions of this so do check what yours has to offer
Take five
The UK Finance group is urging all customers to ‘Take Five to Stop Fraud’, which means that you should stop and think before giving out any information or agreeing to any transaction.
They say that consumers should Stop, Challenge and Protect to stop themselves becoming fraud victims.
- STOP – Taking a moment to stop and think before parting with your money or your information could keep you safe, the group says
- CHALLENGE – Could it be fake? It’s ok to reject, refuse or ignore any requests. Only criminals will try to rush you or panic you.
- PROTECT – Contact your bank immediately if you think you’ve fallen for a scam and report it to Action Fraud, either online at https://reporting.actionfraud.police.uk/login or on 0800 1232040. If you are in Scotland, please report to Police Scotland directly by calling 101 or Advice Direct Scotland on 0808 164 6000.
The future of fraud
As quickly as banks and police put in new systems to target fraud, the fraudsters adapt, so it is important to know what is coming down the line.
UK Finance says that AI such as ChatGPT and voice cloning technology will make scams more realistic and sophisticated, while the need for ‘money mules’ will also continue to soar as the fraudsters try to funnel funds into accounts that they control.
Keeping on top of fraud developments by signing up to the Action Fraud alert on https://www.actionfraud.police.uk/sign-up-for-action-fraud-alert and downloading information from the Metropolitan Police https://www.met.police.uk/advice/advice-and-information/fa/fraud/personal-fraud/prevent-personal-fraud/ will help you to avoid scams as they develop in the future.
22 May 2023
2 https://www.ukfinance.org.uk/policy-and-guidance/reports-and-publications/annual-fraud-report-2023