Unlock the Editor’s Digest for free
Banks called on social media companies to “do much more” to protect the public from scammers, as new data showed fraud losses continue to be made through online platforms.
New figures from industry body UK Finance show that criminals stole £571 million through both unauthorized and authorized card payment fraud in the first half of this year.
This was 1.5 percent lower than in the first half of 2023, following a decrease in so-called Authorized Push Payment (APP) fraud.
However, the industry body highlighted that 72 percent of APP scams – where customers are tricked into making payments – come from social media sites, while telecommunications networks account for 16 percent.
“Not only are criminals taking advantage of these platforms to encourage the transfer of money through investments, romance or scams, but criminals are also using scam phone calls, text messages and emails to trick people into handing over personal details and passwords ,” said UK. Finances.
“We need the social media, technology and telecommunications sectors to do much more with us to protect the public and society from fraud.”
The UK Finance report came in the same week that Britain’s Payment Systems Regulator told the Financial Times that social media groups must do more in the “war of attrition” against financial fraud on their sites.
The interventions come as the UK government and industry take steps to improve protection for victims of card fraud.
The government this month confirmed plans to extend the time during which payments can be deferred by 72 hours if there are reasonable grounds to suspect a payment is fraudulent and more time is needed for the bank to investigate.
The payments regulator this month introduced rules to make payment providers liable for losses due to APP fraud up to £85,000.
This week’s UK financial data showed that losses from APP fraud fell 11 percent year-on-year to £214 million in the first half of this year, while the total number of APP cases fell 16 percent to 97,000.
However, the same data showed that cases of unauthorized card payment fraud – where the account holder does not authorize a payment – had increased.
In the first six months of the year, losses from unauthorized card payments, including payment cards, remote banking and checks, totaled £358 million, up 5 percent year-on-year. In the same period, the number of cases rose by 19 percent to just over 1.5 million.
UK Finance said feedback showed criminals were using “increasingly sophisticated social engineering” techniques to trick customers into revealing their one-time access codes so they could verify fraudulent online card transactions.
“Criminals are also taking advantage of online shoppers’ increasing tendency to search for discounted items on social media,” the report said.
“When a customer goes to purchase the product advertised on a ‘fake’ social media profile, the criminal uses stolen card details to purchase the item from a legitimate source and then withholds payment from the customer.”
According to UK Finance, banks had halted £711 million in unauthorized scam payments in the same period.
“It is encouraging to see declines in certain fraud categories, particularly APP, largely due to strong investment by banks, along with industry collaboration and education programs,” said Dan Holmes, director of bank fraud, identity and market strategy at Feedzai. a software group.
However, he added that the increase in unauthorized multi-channel fraud “reminds us that we cannot be complacent.”