In a bid to combat the escalating menace of scamming, UK banks are urging social media enterprises to significantly step up their efforts in shielding the general public. As fresh data from the industrial body, UK Finance, reveals that swindlers pocketed £571 million, roughly €687 million, in the initial six months of the current year through legal and illegal card payment scams.
Notably, although there was a drop of 1.5% compared to the first half of 2023, with a decline in authorised push payment (APP) fraud, the industrial body emphasised that a significant 72% of these APP scams – scams misleading customers into making transactions – can be traced back to social media platforms, whereas 16% are attributable to telecommunication networks.
Besides exploiting these platforms to instigate money transfers through investment, romance, or purchase scams, wrongdoers also resort to scam telephone calls, text messages, and emails to manipulate people into revealing their personal details and passwords, as stated by UK Finance. The Banking institution, therefore, sought a stronger collaboration with the social media, technology, and telecommunications sectors to defend the public from fraudulent activities.
This appeal by the UK Finance comes at a time when not just the government but even industrial bodies are endeavouring to bolster the defenses against card fraud. The government has recently affirmed its decision to extend the delay in payments to 72 hours where there is reasonable suspicion of fraudulent activity and further time is required for a bank’s examination.
Simultaneously, the payment regulator this month imposed rules to hold payment providers accountable for losses resulting from APP fraud up to £85,000. The recent data from UK Finance indicate a decline of 11% in the losses owing to APP fraud in the year’s first half, amounting to £214 million. In contrast, there has been a disturbing rise in the instances of unauthorised card payment fraud, where the account holder doesn’t give consent for the payment.
In the first half of the current year, £358 million was lost to unauthorised payments involving cards, remote banking, and cheques, marking a 5 percent rise from the previous year. Reported incidents increased by 19 percent, exceeding 1.5 million incidences during the same timeframe, as confirmed by UK Finance. Scammers are reportedly employing more intricate social engineering tactics to deceive customers and extract single-use codes for verifying illegitimate online card operations.
UK Finance’s report highlighted that scammers are exploiting the proliferation of online shoppers seeking discounts on social media platforms. Scammers advertise products on counterfeit social media accounts, using stolen card information to buy the item from a genuine source and subsequently pocketing the money paid by the unsuspecting customer.
On a positive note, banks blocked unauthorised scam transactions worth £711 million over the same period, as reported by UK Finance. Dan Holmes, who heads banking fraud, identity, and market strategy at software group Feedzai, commended this trend, attributing it to the commendable investment from banks, productive collaboration across industries, and targeted education programmes. However, he cautioned against complacency due to the rising incidence of unauthorised fraud across diverse channels. – Copyright The Financial Times Limited 2024.