By Phoebe Seers
LONDON, June 15 (Reuters) - Britain’s banks recorded the sharpest increase in losses to certain types of fraud since the COVID-era boom in technology-enabled scams, renewing calls for government action against platforms such as Meta where many cases originate.
Data from industry body UK Finance showed losses from authorised push payment, or APP, fraud - including investment and purchase scams in which criminals trick victims into transferring money - rose 19% to £576.4 million ($772.78
million) last year.
The figures coincide with a review of rules introduced in October 2024 that require banks and payments firms to reimburse victims of such fraud up to £85,000. The UK remains the only country to mandate reimbursement for APP fraud.
Banks returned £354.3 million to victims, according to UK Finance’s annual fraud report, which is based on data submitted by firms across the industry. The data on APP fraud includes losses that are not covered by the reimbursement regime.
SOPHISTICATED SOCIAL ENGINEERING
Ruth Ray, UK Finance’s director of economic crime, told Reuters that fraudsters were becoming increasingly sophisticated in their use of social engineering, aided by AI, widening the pool of potential victims.
"Given most APP fraud still starts via online tech platforms or via telecoms, we urgently need stronger, enforceable responsibilities to be placed on these sectors," Ray said.
Janine Hirt, chief executive of fintech lobby group Innovate Finance, said technology firms should help cover the cost of reimbursement and introduce tougher checks such as seller verification.
Reuters reported last year that internal Meta documents showed the company projected 10% of its 2024 revenue, or $16 billion, would come from ads for scams and banned goods.
In Britain, Meta has repeatedly failed to stop illegal ads for high-risk investment products on its platform, despite committing to block them.
Meta did not immediately respond to a request for comment.
UK Finance said losses to investment scams, driven by social media posts advertising lucrative returns, reached £221.5 million last year, their highest-ever level. Purchase and romance scams also hit their highest levels, the group said.
A spokesperson for the Payment Systems Regulator, which introduced the fraud refund rules, said: "we have consistently called for tech firms to do more to protect their users, while banks and telecoms providers must also play their part."
Frontier Economics is conducting an independent review of the rules and is due to publish its findings in early July.
($1 = 0.7455 pounds)
(Reporting by Phoebe Seers, Editing by Louise Heavens)
