£500m Lost In Bank Fraud - Lessons To Be Learned

Published on: 26th September 2018

The first half of 2018 has seen half a billion pounds stolen from UK consumers and businesses by bank fraud. The scams are varied, and not all of the defrauded victims will get their money back.

One type of scam, a "push fraud", in which people are conned into sending money to another account, is not currently covered by any compensation rights as the person "knowingly" consented to the transfer/payment of money to the scammer. Some of the banks are therefore saying that the individual, not the bank, is liable for the loss due to the action.

Education is key to defeating these kinds of scams, and increasing efforts are being made by the banks to promote greater awareness of these kinds of fraud and a healthy degree of suspicion around ALL bank activity. Building a resilient customer base is a key element in reducing fraud risk.

Additional efforts are also being made by the banks to double check transactions before they are processed. This extends their arsenal of defences against small and large scale fraud.

Industry website, UK Finance,  reports that:

  • Finance industry stops £2 in £3 of attempted unauthorised fraud
  • Purchase scams revealed as the most common type of authorised push payment scam
  • Criminals use social engineering to commit fraud, fuelled by information gained from data breaches

The combination of persuasive psychology with hacked data creates a significant challenge, but with strong education, improved risk analysis by banks, and greater personal responsibility, there is a chance that these figures could be reduced.

PYXI GDPR Team: 26th Sep 2018 08:00:00