Majority of APP scams start online
A UK Finance analysis of Authorised Push Payment (APP) scams indicates that 70% of them originated on an online platform. As we know, the Covid-19 pandemic has driven many more consumers to shop online, and fraudsters have not been slow in taking advantage of this.
According to Finextra, “the banking and finance industry saw a jump in online-enabled push payment or bank transfer fraud with increases in investment (32 per cent), romance/dating (38 per cent) and purchase scams (7 per cent). Furthermore, between 96 and 98 percent in each of the categories started online.
It has also been noted that impersonation scams have risen significantly in number is recent months, with most of these being initiated via telephone calls and text messages. Many of the scams reported relate to health or to taxes, both used to make people react through fear. The scammers involved in these have a habit of targeting the most vulnerable, i.e. older people who are more likely to be taken in by the scam and lose significant amounts of money as a result.
Half a billion lost through scams in 2020
It is sobering to think that in the UK alone, “nearly half a billion (£479 million) in 2020,” was lost through APP scams. Furthermore, the proceeds from these scams are reportedly being used to fund “serious organised criminal activities, including terrorism, drug trafficking and child sexual exploitation.”
We must all be aware that these criminals are experts at adapting their scams “to capitalise on any shift in consumer behaviour and vulnerabilities across digital platforms.”
David Postings, Chief Executive at UK Finance, said: “As more of us have shifted online because of the pandemic, we’ve seen a spike in money mule activity and investment and purchase scams because criminals can target people directly in their homes across online platforms. The banking and finance industry is continuing to tackle fraud on all fronts, but there is a limit to what we can do alone.”
He added, “I welcome the recent steps taken by some online platforms to work with us on tackling this issue. This shows commitment and is evidence of the mergence of greater cross-sectoral collaboration to tackle the root causes of economic crime.”
Creditum’s advice on staying safe
The Creditum team urges everyone to double and triple check any emails, texts or phone calls allegedly coming from your bank, the tax office or your healthcare provider and even Amazon. Requests to update your account details for example are one example of a red flag. Remember nobody should ask for your password, or any other details that could put your money at risk. If you receive a call supposedly from your bank — don’t do anything until you have called your bank to ask them if they have called you — nine time out of ten, it isn’t them.
We urge you to stay safe online, and not become a victim of the fraudsters.