Authorised push payment fraud (APP), where criminals trick victims into handing over personal details, increased by around 22 per cent in the first six months of the year.

According to a new report by UK Finance, the increase in APP fraud was largely driven by purchase scams, where people are tricked into paying for goods which never materialise. These rose by 43 per cent during the first half of the year and accounted for two thirds of all APP cases, amounting to a value of around £40.9 million.

The trade association said that criminals stole around £580 million through unauthorised and authorised fraud in the first half of 2023, representing a two per cent decrease compared with the same period of 2022. During this time, banks managed to prevent around £651 million from being stolen through their advanced security systems.

It added that around £152.8 million of APP fraud losses was returned to victims over the period, or around 64 per cent of the total loss. This increased by 13 per cent from £135.6 million compared with the first half of 2022.

The organisation found that 77 per cent of APP fraud started online with a further 17 per cent initiated through telecommunications. The latter had higher value cases and accounted for 45 per cent of the total losses.

Ben Donaldson, managing director of economic crime at UK Finance, said that financial crimes often involved “callous manipulation” which could cause psychological and emotional harm to the victims.

“The financial services sector continues to lead the fight against these awful crimes,” continued Donaldson. “We are also currently the only sector that reimburses victims.”

He added: “However, it is impossible to reimburse the human impact of these crimes: we must prevent it from happening in the first place. The only way we will prevent fraud is if other sectors do much more to help us deal with the criminality which is increasingly taking place on their platforms.

The research also found that losses due to unauthorised fraud across payment cards, remote banking and cheques fell three per cent across the six-month period to £340.7 million, while the total number of recorded cases fell by ten per cent to 1.26 million.

UK Finance said that there was a “notable” increase in card ID theft losses, which rose 57 per cent to £33.1 million.

Victims of unauthorised fraud are legally protected against these losses, with UK Finance estimating that around 98 per cent of customers are fully refunded.

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