A rise in financial crime fueled by the pandemic led the U.K.’s Financial Conduct Authority (FCA) to issue 568 million British pounds (about $775 million) in fines last year, according to a Monday (Jan. 17) press release emailed to PYMNTS.
The total is made up of fines against major banks, as well as levies against people for insider dealing, non-financial misconduct and carrying out regulated activities with no authorization, the release stated.
“The pandemic has provided criminals with the opportunity to defraud, launder and perpetrate other forms of financial crime with more efficiency than ever before,” Dr. Henry Balani, leading regulation expert for Encompass Corporation, said in the release. “Lockdown, and the resulting dependence on digital services, has made it easier for criminals to impersonate legitimate services and scam consumers. On the other hand, it has caused difficulties for the financial institutions themselves to detect malicious activity, as digital identities are harder to verify than the physical or in-person alternatives that existed before the pandemic.”
At the same time, the FCA said in the release it was successful at protecting consumers. Its contact center prevented 4 million British pounds (about $5.5 million) from being lost to scams and secured 5 million British pounds (about $6.8 million) for people who invested in companies that weren’t permitted to carry out financial activity.
More than 1.2 billion British pounds (about $1.6 billion) has been paid out to settle claims made by small businesses following a court ruling that clarified business interruption insurance cover, according to the release.
“Unfortunately, the number of scams prevented, and fraudsters fined in 2021 is just a fraction of the total amount of financial crime successfully perpetrated,” Balani said in the release. “Therefore, combatting it requires a concerted effort from not just the regulator, but the financial institutions, industry leaders and banks themselves.”
England was not alone in seeing a rise in financial crime connected to the pandemic. Last month, the U.S. Secret Service assigned a special agent to oversee the recovery of nearly $100 billion stolen from pandemic relief funds.
Read more: Secret Service Names Special Agent to Go After $100B Pilfered by Pandemic Fraudsters
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