Increasing incidents of fraud against online shoppers and digital banking newcomers across Britain since the start of the COVID-19 pandemic is “a national security threat” that requires government-backed action, banking industry lobby group UK Finance said, according to a Reuters report Wednesday (Sept. 22).
Criminals stole about 754 million pounds ($1.03 billion) through bank-related fraud across Britain in the first half of the year, up 30% from the same time in 2020, according to a UK Finance report.
Authorized push payment (APP) fraud — where customers pay a criminal believing it’s someone else — were up 71% in the first six months of this year, the report said, moving ahead of card-based fraud for the first time.
UK Finance’s report shows 70% of APP scams were based online and noted the rise in online ads seeking people as young as 14 to become so-called “money mules” for illegal activities. The group pushed for government action through a planned Online Safety Bill, which doesn’t include online ads in its current form.
“The level of fraud in the U.K. is such that it is now a national security threat,” said Katy Worobec, managing director for economic crime at UK Finance, in the report. “The banking sector cannot solve this on its own.”
The report said bank security systems stopped about 736 million pounds ($1 billion) from being stolen through fraudulent means in the first half of this year. The Financial Conduct Authority said last week that Britons lost about 570 million pounds ($778 million) in investment fraud this year through April, three times the 2018 total.
The European Banking Authority said Tuesday (Sept. 21) that regulators don’t fully understand the risks associated with banks creating digital marketplaces.
“Indeed, it appears that the vast majority of competent authorities currently have a limited understanding of platform-based business models,” the authority said.