Surge in UK fraud a national security threat, warn banks

By Iain Withers

LONDON, Sept 22 (Reuters) - A surge in fraud attacks on
consumers since the pandemic has become a 'national security
threat' for Britain requiring government-coordinated action
across industries, banking industry lobby group UK Finance has
warned.

Financial fraud has rocketed during the pandemic as more
consumers shop online and try digital banking and investing.

Criminals stole 754 million pounds ($1.03 billion) through
bank frauds in the first half of this year, up 30% on the same
period in 2020, according to a UK Finance report published on
Wednesday.

Bank losses from authorised push payment (APP) fraud - where
a customer is tricked into a payment by a criminal - also leapt
71% in the first half, overtaking the amount stolen through card
fraud for the first time, UK Finance said.

Lenders have been pushing for tougher action on fraud by the
government, regulators and other industries including online
platforms exploited by fraudsters to target victims, as they
grapple with a wave of increasingly sophisticated attacks.

The report found 70% of APP scams originated on an online
platform and also found an increase in online adverts targeting
people as young as 14 to become "money mules" for illicit funds.

The findings come ahead of a grilling of bosses from
Facebook, Alphabet Inc's Google, Amazon
and eBay on their efforts to combat economic
crime by British lawmakers on the Treasury Select Committee
later on Wednesday.

UK Finance called for government-coordinated action across
sectors and for all economic crime to be covered by a planned
Online Safety Bill, which currently excludes online
advertisements.

"The level of fraud in the UK is such that it is now a
national security threat," Katy Worobec, managing director for
economic crime at UK Finance said in the report. "The banking
sector cannot solve this on its own."

Bank security systems managed to prevent 736 million pounds
from being stolen by fraudsters over the six month period, the
report said.

Watchdog the Financial Conduct Authority said last week that
consumers lost nearly 570 million pounds to investment fraud
alone in the financial year to April - a sum that had tripled
since 2018.
($1 = 0.7328 pounds)
(Reporting by Iain Withers; Editing by Emelia Sithole-Matarise)