It details losses from unauthorised (where scammers carry out transactions without your consent) and authorised fraud (when you're tricked into agreeing a payment to an account controlled by a criminal) reported by more than 300 firms in financial services.
UK Finance – the trade body for the UK banking sector – says many of the cases are facilitated by online platforms such as social media and is calling for the new fraud reimbursement cap coming into force in October to be reduced from £415,000 to £85,000.
Here Which? takes a closer look at the headline figures and the latest fraud trends plus why we're calling on ministers to resist calls from finance firms to slash the scam reimbursement limit for victims.
Unauthorised fraud in 2023
It's largely a positive picture in terms of unauthorised fraud.
In 2023, the industry prevented the equivalent of 64p in every £1 of attempted unauthorised fraud, up from 61.5p in every £1 in 2022.
However, drilling into the details reveals that losses from lost/stolen cards (up 4% to £104m) and card ID theft (up 53% to £79.1m) are at their highest levels since 1991.
Card ID theft occurs when criminals use stolen or forged documents to apply for a card in your name or take over an existing card account.
Mobile banking fraud cases – when a scammer gains access to your account through a banking app downloaded to a mobile device – have also overtaken online (website) banking cases for the first time ever.
Find out moreSpike in purchase and romance scams
When it comes to authorised push payment (APP) fraud, losses fell 5% to £459.7m, but the number of cases is up 12% to 232,429.
Progress has been made to reduce impersonation fraud, but romance and purchase scam cases and losses are the highest ever recorded.
Scammers target most victims online
The UK Finance report says that 76% of APP fraud cases originated from online sources such as social media or auction sites, while the telecommunications sector accounted for 43% of total losses in 2023.
Neither online platforms nor telecom firms are currently under any formal obligation to reimburse fraud victims, although the new Online Safety Bill means they must remove harmful content, including scams.
Ofcom is responsible for ensuring platforms implement these changes. Which? is calling for robust codes of practice and significant fines for firms that break the rules and fail to protect their users from scams.
Find out more:Banks want APP fraud cap slashed
While there is strong legal protection for unauthorised fraud victims, bank customers who lose money to APP fraud are currently only protected by a voluntary scheme.
The UK Finance report states that customers are fully refunded in more than 98% of unauthorised fraud cases. For authorised fraud, only 62% of all APP losses were returned to victims in 2023.
Under current plans, all firms using Faster Payments will be required to split the cost of reimbursing victims of APP fraud from 7 October 2024, in all but exceptional cases.
When asked how many potential fraud victims would miss out on reimbursement if this were the case (i.e. what proportion of victims lose over £85,000), it was unable to give a number but said it was 'small'.
UK Finance also expressed concerns that the threshold for gross negligence hasn't been clearly defined by the PSR.
Which? responds to UK finance fraud report
Rocio Concha, Which? Director of Policy and Advocacy, said: 'This is another shocking set of fraud figures and underlines the huge amount of work the government and businesses in different sectors must do to get a grip on this crisis as a new generation of AI-powered scams emerges.
'The Online Safety Act should finally mean accountability and multi-million pound fines for tech firms that fail to stamp out scams on their platforms - but these companies must act ahead of new rules taking effect, as every day that passes means more lives devastated by fraud.
'Fraudsters can only operate where banks and payment providers fail to put effective security measures in place so ministers must resist calls from finance firms to slash the scam reimbursement limit for victims of authorised push payment fraud by more than 90% and instead tell them to get their houses in order. The government rightly prioritises growth, but growth built on the backs of scam victims and financial crime is not acceptable.
'The next government must make fraud a national priority and appoint a dedicated Fraud Minister tasked with working across departments and with industry to develop and deliver a clear strategy to stop organised crime so people are less likely to be targeted by scammers or face devastating financial and emotional consequences if they do become victims.'
Find out more: undefinedsource https://www.which.co.uk/news/article/fraudsters-stole-1.17-billion-from-victims-in-2023-ahyn91E3zaNT