News & Views - Savantor

Fraud and the pandemic

Wednesday, 16 September 2020

The coronavirus pandemic has resulted in a significant increase in the amount of time we all spend online. Unfortunately this has led to cybercriminals taking advantage of the situation with the result that there has been a considerable increase in fraudulent activity. 

Barclays has reported a 66% increase in scams for the first six month of this year; the trend does not appear to be slowing down as recent figures indicate volumes for July are up a further five percent on June data. The bank also recorded a 49% jump in July in the volume of investment scams being committed, the highest Barclays has ever reported. 

UK Finance has also just issued a warning that criminals have been exploiting and adapting to the circumstances created by the virus with a growth in fraud and scams that target people online. Figures collated by the industry body indicate that there has been an 84% increase in impersonation scam cases  compared to the same period last year.

Many of these scams target customers to obtain their personal and financial details, for example through phishing emails or text messages impersonating trusted organisations. As there is often a delay between criminals obtaining people’s details and using them to commit fraud, the full losses from these Covid-19 related scams in the first half of this year have probably not yet have been fully realised.

Figures collated by UK Finance suggest criminals have been eschewing more traditional forms of fraud due to the impact of the pandemic. Contactless card fraud, which takes place using lost and stolen cards, fell by 20%, the first year-on-year decrease since this data started being collected in 2013. This is likely to be related to the reduced number of face-to-face transactions by consumers using contactless cards during the lockdown. Cheque fraud losses also saw a significant fall of 78% to £6.4 million, similarly likely to have been driven by the reduced use of cheques during the lockdown period. 

Unauthorised fraud also fell by 8%, with the industry preventing £853 million of attempted unauthorised fraud over the same period, up four per cent on the previous year. This equates to almost £7 in every £10 of attempted fraud being blocked in the first half of this year.

There has not been an increase in Authorised Push Payment (APP) fraud which remained in line with the same period last year. Encouragingly, finance providers were able to return £73.1 million of APP fraud losses to victims, which is up 86% compared to last year.

Nevertheless, criminal gangs have no compunction about ruthlessly exploiting the pandemic to commit fraud. As urged by UK Finance, the public need to be extra vigilant in their dealings and transactions online.

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