Britain’s banking sector has recorded a significant uptick in losses from certain forms of fraud, with industry data showing the biggest rise since the surge in technology-enabled scams seen around the COVID period. The trade association UK Finance reported that losses from authorised push payment (APP) fraud - which covers investment and purchase scams where victims are deceived into transferring funds - increased 19% to £576.4 million last year.
The figures arrive in the wake of new rules introduced in October 2024 that require banks and payments firms to reimburse victims of APP fraud up to £85,000. The United Kingdom is identified in the report as the only country that mandates reimbursement for APP fraud. According to UK Finance’s annual fraud report, banks returned £354.3 million to victims as part of that regime.
UK Finance noted that the APP fraud total incorporates losses that fall outside the reimbursement framework as well as those that are covered by it. Within the breakdown of scam types, losses tied to investment scams reached £221.5 million last year, a record level in the dataset, driven in part by social media posts promoting apparent high-return investments. Purchase scams and romance scams also recorded their highest levels in the same period.
Industry officials and lobby groups have urged broader action to curb the growth in these scams. Ruth Ray, director of economic crime at UK Finance, warned that fraudsters are getting more sophisticated in their social engineering tactics, a trend she says is amplified by the use of artificial intelligence. "Given most APP fraud still starts via online tech platforms or via telecoms, we urgently need stronger, enforceable responsibilities to be placed on these sectors," Ray said.
Janine Hirt, chief executive of fintech lobby group Innovate Finance, argued that technology firms should contribute to the cost of reimbursements and implement tougher verification checks such as seller verification to limit malicious listings and posts. A spokesperson for the Payment Systems Regulator - the body that introduced the fraud refund rules - said regulators have consistently called for tech firms to increase protections for their users, while noting that banks and telecoms providers must also play a role.
The report also referenced internal documents from Meta that showed the company projected 10% of its 2024 revenue, or $16 billion, would come from advertising for scams and banned goods. The report stated that, in Britain, Meta has repeatedly failed to block illegal ads for high-risk investment products on its platform despite commitments to do so. Meta did not immediately respond to a request for comment, according to the material summarised in the industry report.
Separately, industry stakeholders noted that an independent review of the October 2024 refund rules is under way. Frontier Economics is conducting that review, with findings expected to be published in early July.
For reference, the report used an exchange rate of $1 = 0.7455 pounds when noting dollar-denominated figures.
The UK Finance data and accompanying commentary have renewed pressure on technology platforms and telecoms providers to adopt more robust safeguards and share responsibility for the financial impact of APP fraud. Banks say they are reimbursing victims under the new rule, but industry voices argue that preventing illicit listings and reducing the routing of victims to fraudsters should be a priority for platforms that host the content from which many scams originate.