Card ID theft on the rise in the UK

Card ID theft in the UK rose by 14 per cent in 2023, faster than any other type of financial fraud, with criminals increasingly targeting individual consumers rather than vulnerabilities in security systems.

Losses from Card ID fraud — which involves the use of personal details — grew 53 per cent last year to £79.1mn, with the number of reported cases increasing by 74 per cent, according to data from UK Finance’s annual fraud report.

The trend highlights a change in criminal behaviour which now mostly targets single individuals instead of wider systems by stealing their personal data through a variety of means, including mobile scams and collecting data from mailboxes and social media.

“[The data] suggests fraudsters are becoming more measured in their approach, by compromising a card identity in a direct channel before making fraudulent transactions on the card,” said Dan Holmes, fraud prevention strategy and subject matter expert at data science company Feedzai in the foreword to the report.

The increase comes as the overall amount lost to financial fraud fell 4 per cent last year to £1.17bn from nearly 3mn incidents

Authorised push payments fraud losses have shown a slight decrease, even as the number of cases continues to rise. The report points to an increase of 12 per cent this year compared to data collected by the firm in 2022.

APPs are a type of payment scam where fraudsters trick a person into making a transaction by posing as their bank or another trusted individual or institution.

The report found that the vast majority of authorised push payments (76 per cent) were coming from online sources as opposed to other means, including telecoms and emails, which are not required to reimburse victims of fraud. The figures are similar to the ones shared by UK Finance in 2022.

Even though fraud cases involving APPs are more difficult to manage because the payments are authorised by the victim, the chances of reimbursement are increasing. According to the report, last year 62 per cent of all the money subtracted from customers was returned, an increase from 59 per cent in 2022. This follows mandatory reimbursement established last year by the Payment Systems Regulator.

According to UK Finance, the results are due in part to new measures applied by UK banks to prevent criminal activities targeting their clients. However, more work needs to be done to tackle the issue, said the organisation.

UK Finance’s managing director of economic crime, Ben Donaldson, added in a press release that the financial services sector “remains at the forefront” of efforts to prevent fraud.

Concerns were also raised by other market participants, including Alastair Douglas, CEO of TotallyMoney, who said that scams have become increasingly “common, complex and convincing” and has called for banks, the government and other players to do more to protect the public.

“Fraud is not just having a massive impact on people’s mental and financial well-being, but also the economy, and while we’ve seen a slight drop compared to 2022, last year fraudsters tried scamming the public of almost £2.5bn, and almost half were successful,” said Douglas.