Card fraud scourge prompts fresh call for social media action

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Banks called for social media companies to “do far more” to protect the public from scammers as new data showed fraud losses continue to be driven via online platforms.

New figures from UK Finance, an industry body, showed criminals stole £571mn through both unauthorised and authorised card payment fraud in the first half of this year.

This was down 1.5 per cent on the first half of 2023, after a decline in so-called authorised push payment (APP) fraud.

However, the industry body highlighted that 72 per cent, of APP scams — where customers are tricked into making payments — originated on social media sites, with telecommunications networks accounting for 16 per cent.

“Not only do criminals take advantage of these platforms to encourage the transfer of money through investment, romance or purchase scams, but criminals also use scam phone calls, text messages and emails to trick people into handing over personal details and passwords,” said UK Finance.

“We need the social media, technology, and telecommunications sectors to do far more in partnership with us to protect the public and society from fraud.”

The UK Finance report came in the same week the UK Payment Systems Regulator told the Financial Times that social media groups must do more in the “war of attrition” against financial fraud on their sites.

The interventions come as the UK government and industry take steps to improve protections for card fraud victims.

The government this month confirmed plans to extend the time that payments can be delayed by 72 hours where there are reasonable grounds to suspect a payment is fraudulent and more time is needed for the bank to investigate.  

The payments regulator this month introduced rules to make payment providers liable for losses to APP fraud up to £85,000.

The UK Finance data this week showed losses due to APP fraud in the first half of this year were down 11 per cent year-on-year to £214mn with the total number of APP cases falling 16 per cent to 97,000.

However, the same data showed cases of unauthorised card payment fraud — where the account holder does not authorise a payment — had increased.

In the first six months of the year, losses from unauthorised card payments, covering payment cards, remote banking and cheques, totalled £358mn, up 5 per cent year-on-year. Over the same period the number of cases climbed 19 per cent to just over 1.5mn.

UK Finance said feedback suggested criminals were using “increasingly sophisticated social engineering” techniques to trick customers into divulging their one-time passcodes so they could authenticate fraudulent online card transactions.

“Criminals are also taking advantage of the increasing tendency for online shoppers to search for discounted items on social media,” said the report.

“When a customer goes to buy the product advertised on a ‘fake’ social media profile, the criminal uses stolen card details to purchase the item from a legitimate source and then keeps the payment from the customer.”

Over the same period, banks had stopped £711mn of unauthorised scam payments, according to UK Finance.

“It’s encouraging to see declines in certain fraud categories, in particular APP, thanks in most part to strong investment by banks, along with industry collaboration and education programmes,” said Dan Holmes, director of banking fraud, identity and market strategy at Feedzai, a software group.

However, he added that increases in unauthorised fraud across multiple channels “reminds us that we cannot be complacent”.