RED ALERT: How Much Is Fraud Really Damaging the UK?

Financial Fraud Action (FFA) UK recently released the Year-End 2015 fraud update report, exposing some discouraging truths about the ongoing battle with fraudsters, especially for the banking industry.

The study revealed that sums stolen through internet and telephone banking fraud increased by 72% last year. In particular, losses on payment cards jumped by 18% to £567.5 million.. Losses due to technology-based fraud also soared, increasing by a quarter year-on-year to more than £755 million[1].

Fraud methods are becoming increasingly more complex and creative by the day. Malware attacks and data breaches are turning more sophisticated and the number of impersonation and deception scams is growing.

Scams where a fraudster approaches members of the public claiming to be from a trusted organisation, such as a bank, the police, a utility company or a government department, are now particularly commonplace. As many as 8,000 phishing emails are reported each month, according to the City of London Police[2].

Fraudsters use many means of deception to obtain personal and financial details that can later be used to commit fraud. For instance, fraudsters use letters, texts or emails to prompt their victim to phone their bank on a provided number. The call is then transferred to a legitimate phone line operated by the victim’s bank, where he or she logs in as usual by providing key letters of a password and other personal information. All of this is recorded, allowing the fraudster to build up information which could be used in future to access the account while the fraudster’s presence remains unknown to both the victim and the bank[3].

Banks are aware of this threat and are working hard to protect their customers, using highly sophisticated security systems and forensic analysis. A total of £524.6 million of attempted remote banking fraud was stopped by bank security systems, which equates to £8 in £10 of fraud being prevented.

Unfortunately, fraudsters are moving faster than the banks. And financial entities are damaging their brand reputation and losing consumer confidence (and sales) with every new attack.

Stronger consumer authentication is now essential to eliminate fraud in a cross-channel, cross-border marketplace; and it should take place in a manner that inspires trust and minimal consumer disruption.

MYPINPAD leverages existing connectivity to offer adaptability and high security standards while maintaining a smooth customer experience and minimising fraud. We believe in working alongside existing banks and issuers, offering harmony not disruption.

[1] Financial Fraud Action, 2015.

[2] City of London Police, March 2016.

[3] Bank fraud is upping its game, The Daily Telegraph, Your Money, 22nd March 2016.

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