The finance industry prevented £1.66 billion of unauthorised fraud during 2018, according to UK Finance.

During the same period, a total of £1.2 billion was stolen by criminals committing both authorised and unauthorised fraud.

The industry body’s research suggested that the theft of personal and financial information through social engineering caused by data breaches outside the financial sector was a major contributor to the fraud losses.

In an unauthorised fraudulent transaction, the account holder themselves does not provide authorisation for the payment to proceed and the transaction is carried out by a third party.

Total losses due to unauthorised fraud across payment cards, remote banking and cheques in 2018 were £845 million, an increase of 16 per cent compared to 2017.

Losses due to unauthorised transactions on payment cards increased 19 per cent to £671 million. Three quarters of the card fraud losses - £506 million - was due to remote purchase fraud, where stolen card details are used to buy something online, over the phone or via mail order.

Losses due to unauthorised remote banking fraud totalled £153 million, two per cent lower than 2017. This category covers unauthorised fraud through internet banking, telephone banking and mobile banking. Banks prevented £318 million of attempted unauthorised remote banking fraud.

Cheque fraud losses rose by 109 per cent to £21 million. The volume of fraudulent cheques increased by only 16 per cent, indicating that a small number of high-value fraudulent transactions made during the year led to the rise in losses rather than a change to the longer-term downward trend in this type of fraud. A total of £218 million of attempted unauthorised cheque fraud was prevented.

In terms of authorised push payment (APP) scam - where a customer is duped into authorising a payment to another account which is controlled by a criminal - a total of £354 million was lost, split between personal (£228 million) and business (£126 million) accounts.

In total there were 84,624 APP scam cases, split between personal (78,215 cases) and non-personal (6,409 cases) accounts. Financial providers were able to return a total of £83 million of the losses.

In February, the Authorised Push Payment Scams Voluntary Code was agreed following work between the industry, consumer groups and the Payment Systems Regulator. The Code, which comes into effect on 28 May, will bring new protections for customers of payment service providers who sign up to it.

UK Finance only began collating data on APP scams from 2017 onwards. Losses due to APP scams in 2017 totalled £236 million across 43,875 cases.

Katy Worobec, managing director of economic crime at UK Finance, said: “Every business, from online retailers to social media companies, as well as the public sector, has a duty to work together to beat fraud and prevent stolen data getting into the hands of criminals.

“The industry continues to fight fraud on every front to protect customers and prevent this kind of crime – investing in advanced security systems and new ways to track stolen funds, assisting law enforcement in tackling the criminals and supporting the government in improving the ways in which intelligence is shared.”

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