Every year, official figures are produced which demonstrate the total cost of financial fraud within all areas of the United Kingdom’s financial markets economy.

These figures, which are compiled every year by UK Finance, a non-government organisation which represents the banking and financial services industry, consist of several metrics relating to the total amount of fraudulent transactions conducted against British citizens and businesses, in areas which include unauthorised transactions which fall into five categories.

Those categories are Trends and Statistics, Card Fraud, Remote Banking Fraud, Cheque Fraud and Authorised Push Payment (APP) Fraud.

The 2023 UK Finance Annual Fraud Report, to give it its full name, reports on the full extent of unauthorised transactions which took place in 2022 and confirms that the full extent of fraud across the United Kingdom in 2022 totalled £1.2 billion.

That may certainly appear astonishing, and there is no doubt that this level of fraudulent activity bears a high cost to individuals and businesses who must pay to cover it each year.

Whilst many types of fraudulent activity make up this total figure, it is worth focusing on two areas when considering the safety of personal funds when using electronically accessible accounts in today’s age of online banking, online transactions, and application-based management of personal funds.

These two areas are Authorised Push Payment (APP) fraud and Card ID Fraud.

Authorised Push Payment (APP) Fraud

With the increasing reliance on Big Tech and its dominance in the world’s corporate landscape – Amazon, Facebook, Netflix and Google are not only internet giants which convey data relating to almost every citizen worldwide – and increasing reliance on the Big Tech internet giants for everyday transactions, the role the interaction with Big Tech plays in fraud is continually increasing.

Most people in Western countries, especially in Britain which has the highest use of digital payment methods and highest percentage per capita of digital and contactless payments in Europe, are now having to be vigilant when making transactions online.

The level of sophistication of fraudsters has increased in line with the development of online retail, and many fraudsters are already starting to adopt AI to amplify their attack sophistication, with the use of generative AI like ChatGPT and voice cloning poised to make scams ever more convincing.

Losses due to APP fraud amounted to a total of £485.2 million in 2022. This was split between personal (£408.2 million) and non-personal or business (£77 million).

There has recently been an increasing number of cases in which criminals use ‘social engineering’ tactics, which involve a fraudster impersonating a genuine provider of service or goods to dupe members of the public into handing their funds over.

Such scams are often operated via SMS messages, email, outbound telephone call centre communications or even social media posts.

It is very well worth considering whether anyone who makes an unsolicited call or approaches you via social media or SMS message is whom they say they are. Check the originator’s email address, telephone number and style of message. Did the SMS come from a mobile number rather than an official channel? Is the originator’s email address a personal one rather than a from a recognised corporate domain? Is the address totally hidden?

If so, it is always worth erring on the safe side. Remember you do not need to buy anything there and then!

Card ID Fraud

One of the best aspects of the level of high technology which underpins Britain’s retail financial services environment is that life is very convenient. Most people go about their day simply tapping a mobile device onto a contactless payment terminal, with no need to carry a traditional physical wallet with cash and cards in it.

The downside is that traditional methods of stealing money have become equally as obsolete as the paper money that used to be the darling of the common ‘pickpocket’ has largely disappeared.

Many fraudsters have become extremely well-versed in software engineering and, in some cases, operate as finely-honed commercial entities, battling to overcome the increasing levels of security technology implemented by financial services companies.

This dynamic has made for a quite staggering increase in card ID fraud.

In 2020, the number of reported cases of card ID theft in the United Kingdom was 34,545. By 2021 this had risen to 40,026, but in 2022, it had risen by an astonishing 105% to 82,064.

This makes card ID theft the fastest-increasing type of financial fraud in the United Kingdom.

The stealing of personal account information by fraudsters to be able to make unauthorised transactions by using methods of accessing 16-digit debit and credit card numbers, expiry date information, and the three-digit CVC security code often printed on the back of a physical debit or credit card.

Tactics used to access such information vary. Some are very simple, such as using a card scanning device at an ATM, which records the card details and PIN number entered by the cardholder, allowing a fraudster to manufacture a clone card and then withdraw cash by entering the PIN number.

Other more sophisticated methods include using internet ‘phishing’ techniques to lure people into entering their card details into a web portal, thus handing them over to a fraudster who can then make one large transaction which goes directly via a payment processing provider into the fraudster’s account, or developing hacking methods to access e-wallet applications or passwords and usernames of online accounts.

This latter type of activity has risen dramatically in prevalence since 2021 and can perhaps be attributed to the change in shopping behaviour that has taken place across many Western countries, including the United Kingdom, driven by government directives that have forced people onto online methods of conducting transactions and making purchases.

For this reason, it is vital to be very vigilant and ensure that your funds are being properly safeguarded by the provider of your online account.

Monevium has taken this very seriously from the outset, and the mobile app was designed from the ground up with high levels of security in mind.

Monevium is a FinTech company rather than a bank and therefore places technology first rather than the reactionary steps taken by many traditional banks.

The Monevium mobile application has two-factor authentication (2FA), meaning that in the event of a fraudster obtaining account details from an account holder, simply entering the account details, including username and password, would not be sufficient for the fraudster to access the account, as a further level of authentication would be needed, such as biometric facial recognition, which would be impossible to recreate by a fraudster.

Additionally, Monevium’s app removes the need for reliance on physical bank cards, which can be a security liability as they have unique numbers printed on them, which can be used by fraudsters if mislaid. The virtual cards which Monevium’s app provides are not based on a physical card at all and are fully encrypted inside the mobile application’s e-wallet for use via contactless payment systems.

To be able to use these cards, the cardholder must use facial recognition or a PIN code to activate them at a point-of-sale terminal. Should a pickpocket steal the phone which holds the e-wallet, it would be of absolutely no use whatsoever to the thief as the details would not be viewable, and the contactless system would not activate.

For those who still prefer to use a physical card, quick action can be taken by a cardholder if a card is either lost or stolen, as it can be cancelled immediately from within the mobile application, limiting the liability of it falling into the wrong hands.

These are just some of the important steps Monevium has taken to ensure your security in an increasingly high-tech world of financial fraudsters.

The figures may be stark, but we are there to ensure your peace of mind.

Monevium is the Trading Name of Advanced Wallet Solutions Limited, a company registered in the UK under company number 10251711 and is regulated by the UK’s Financial Conduct Authority under Firm Reference Number 766038.