Scams and online attacks are the main culprits behind the increase in financial fraud in the first half of 2016, new figures from Financial Fraud Action show.
In the first half of the year, financial fraud across payment cards, remote banking and cheques increased by 25% to £399.5m. In the same period last year, total losses for the period totalled £320.3m. However, the amount for prevented fraud this half totalled £678.7m – or for every £10 of attempted fraud, £6 were prevented.
Worryingly, the sum lost to fraud on payment cards,which includes remote purchase fraud, lost and stolen cards, card not received, counterfeit card and card ID theft is up. In the first half of 2016, the sum added up to £321.5m compared to £244.6 million in the first half of 2015, an increase of 31 per cent. The prevented loss for cards stood at £475.7 million.
Between January and June, remote purchase fraud increased by almost a third (31%) to £224.1m, compared to £171.5m in the same period last year. Financial Fraud Action suggests the increase could be down to more card details being obtained from data breaches, better malware and simply the fact that the number of e-commerce websites has increased.
Remote banking losses experiences a bit of a bump as losses rose from £66.2 million in the first half of 2015, to £70.6 million, with a prevented loss of £103.2 million. FFA says scams remain this type of loss’s biggest driver with people being tricked into handing over their bank details or money.
“The industry takes its responsibility to combat fraud extremely seriously, but banks cannot stop all fraud on their own. It is essential all organisations with a role to play work together to better protect individuals and companies,” said Katy Worobec, Director of FFA UK.
The FFA recommends customers be very vigilant against any form of communication in which somebody requests your financial information. Things like texts, unsolicited phone calls and emails must be verified.
Tony Blake, senior fraud prevention officer at the Dedicated Card and Payment Crime Unit, the FFA UK-sponsored police unit which investigates fraud, said:
“If you are asked to transfer some money or provide your personal details and you think it could be a scam, take five minutes to think about what you are being asked to do. A genuine organisation will not mind if you check who you are speaking to, because people are not always who they say they are.”
It should be borne in mind that the police or the bank would never ask customers for their passwords or PINs – especially citing fraud reasons.
“Fraudsters can be very convincing and often pose as representatives from a trusted organisation in order to appear genuine,” added Blake.
Eastern Europe is still very much a region finding its identity following the breakdown of the Soviet Union over 20 years ago. Countries in the region are at various stages of economic growth and payments infrastructure development, and the e-commerce landscape looks different as you cross borders.
The failure to keep pace with expanding compliance procedures has seen a rise in the number of financial penalties issued by regulators over the past few years. As anti-money laundering (AML), know-your-customer (KYC), counter-terrorism financing and other compliance obligations expand across different territories, organisations large and small have struggled to maintain adequate and comprehensive safeguards – often resulting in sizable fines and significant reputational damage.
A new report published by Earnix shows findings stating that most millennials will use a single portal to aggregate services from multiple banks with which they have existing customer relationships in the future. The report, The Role of Analytics in the New Banking Age 2017, also states that most banks believe predictive analytics and machine learning will become the most powerful way to win back customers over the next five years.
The Global Business and Spending Outlook looks positive for the B2B payments industry.