What’s this about?

On 22 May 2024, UK Finance published its Annual Fraud Report (the Report). In the Report, UK Finance analyses data from its 300 members across the financial services industry to report on the value and number of fraud losses.

Our Economic Crime Compliance Lead, Ben Cooper says... 

The fact that the value of fraud losses and number of cases have fallen for the second year in a row, demonstrates that steps taken across the financial services industry are starting to have an impact. However, fraud losses in 2023 still amounted to almost £1.2 billion and so there is further work to do. Firms need to take action to implement mandatory reimbursement and procedures to defend a failure to prevent fraud charge, but importantly, UK Finance again call out the need for tech companies and other sectors to join the financial services industry in fighting fraud."

The points not to miss...

UK Finance call out “small reductions in the amount stolen through payment fraud in 2023, but with losses of nearly £1.2 billion it remains a major threat to the UK”. Across the two primary areas of unauthorised fraud (payment cards and remote banking), 2023 saw a fall in losses compared with 2022. The most significant area of growth across all fraud categories monitored by UK Finance was card ID theft – this usually occurs due to the comprise of personal data. For APP fraud, whilst the total value has dropped, the case numbers have continued to grow with romance and purchase scams being the most common. 

The Report calls out the importance of action from other sectors. UK Finance recognises that the financial services sector spends more than anyone else on combatting economic crime, including fraud and asks other sectors to step up and stop the criminal activity. In 2023, 76% of APP fraud cases originated from online sources and a further 16% from telecommunications but despite this, the sectors are not involved in reimbursing victims. UK Finance say this needs to change and a “cross-sector approach is crucial”.  

The rules on reimbursement from the Payment Systems Regulator (PSR) come into force later this year. UK Finance have noted the work being carried out by members to make sure they are ready, but it does have some concerns on the approach being taken by the PSR. It is noted that the PSR proposal is great for victim protection but there are concerns around the unintended consequences including customer complacency and increased first party fraud.  

It is noted that reimbursement is only part of the solution. The data can only show the value attributed to unauthorised fraud (as it is not possible to capture, for example, where a customer abandons a payment because of effective warning messages). In 2023, £1.2 billion of unauthorised fraud was prevented (7% increase on 2022). On reimbursement for APP fraud, the data shows that reimbursement rates rose across almost all categories of APP fraud in 2023 – and these rates are expected to continue to rise when the mandatory reimbursement comes in later this year.  

The Report notes the changes in the way people accessed banking services during the pandemic meant criminals altered the ways in which they targeted victims. However, the data now shows that losses across the fraud types captured by UK Finance have reverted to pre-pandemic trends (e.g. lost and stolen cards which dropped sharply during lockdown, have returned to pre-pandemic levels).  

Unauthorised fraud losses were £708.7 million in 2023 (down 3% from 2022). Some of the factors which are thought to have contributed to this overall reduction include (1) lenders increasing expiry periods on cards meaning fewer cards are in transit (so fewer cards available to steal), (2) additional activation procedures when cards are received, and (3) the requirements for Strong Customer Authentication. However, increases were seen in unauthorised mobile banking fraud which is considered to be due to the increased use of mobile banking apps. 

Whilst APP fraud losses have decreased, the number of cases has increased. Purchase scams have significantly increased and despite many online platforms offering secure payment options, criminals are tricking victims to pay via a bank transfer. Investment scams have reduced with UK Finance putting this down to the cost of living. However, these pressures are expected to reduce in 2024, and with the media attention around cryptocurrency prices, UK Finance expects these scams to increase. There has been a reduction in impersonation scams (e.g. fraudsters claiming to be from the police or bank staff) – this is considered likely to be down to the extensive education campaigns.


The Report references the fact that many countries are experiencing an increase in most types of fraud, especially scams. For example, Australia is called out as a country with a population of just 26 million people, it recorded AUD 3 billion in APP losses.  

The use of AI is mentioned as both a risk and an opportunity. As fraudsters look at ways around the additional protections put in place by lenders the use of AI to create images, scripts, videos and voices is expected to increase. Whilst the use of AI is not currently considered a driver behind the rise in telephone banking losses, if criminals are using AI, lenders need to consider its use too – for example in considering detection innovation.  

There is a consistent theme throughout the Report of the importance of lenders (and other sectors) to continue to adapt to prevent fraud. UK Finance notes that as new technologies and security systems are deployed it means some routes are more difficult for criminals and so they shift their tactics and look for new opportunities. UK Finance notes the importance of intelligence sharing across the financial services sector and other sectors as key to enabling the continued disruption and prevention of fraud.

What does this mean for you?

It is positive to see UK Finance again calling out the need for other sectors to support and that too great a reliance is placed on the financial services sector. Many lenders have been grappling with the issue of how more can be done to put pressure on tech companies to not only help in the prevention of fraud by improving their own systems and processes but also have some responsibility for reimbursement where a fraud originates from the use of a tech or communication platform.

We understand a number of lenders have been liaising on this point with UK Finance on Ofcom’s consultations and calls for evidence regarding the duties that will apply to the most widely used online sites and apps under the Online Safety Act. It is clear, this will continue to be a big focus over the next 12 months (and particularly with mandatory reimbursement coming into force later this year).  

Publication link UK Finance Annual Fraud Report

Publication date

22 May 2024

Who has published it?

UK Finance

Publication type

Annual report

What's it relevant to?

Financial services industry/ Fraud/

APP Fraud/Romance fraud/ Purchase scams

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at May 2024. Specific advice should be sought for specific cases. For more information see our terms and conditions.

Date published

24 May 2024


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