Authorized Push Payment Fraud Reaches ‘Epidemic’ Levels in UK

The U.K. is experiencing a widespread “epidemic” of payments fraud, in which scammers trick victims into sending money into fraudsters’ accounts, the Financial Times reported Wednesday (June 29).

The report says there was a 40% increase in 2021 in this type of scam, which is called authorized push payment fraud. This shows how criminals have been monetizing the pandemic, as people have shifted more to digital payments.

The report notes that there has been around £1.3 billion in losses to fraud overall last year, a rise from £1.2 billion in 2020. Some £580 million in 2021 was authorized push payment fraud, according to a report from UK Finance, a trade organization for the financial services industry.

The FT report noted that there’s been a rise in authorized push payment fraud from UK Finance members, in which the most common were “purchase scams,” in which victims were coerced into paying for things they didn’t receive.

“Fraudsters have become increasingly adept at adapting their methods to suit changes in our lifestyles and in consumer behavior. We can only tackle this through effective coordinated action,” said Katy Worobec, UK Finance’s managing director for economic crime. “We need continued efforts from government and other sectors to tackle what is now a national security threat.”

One such case, a class-action lawsuit against Wells Fargo and digital pay network Zelle over reported misconduct, has been dropped, PYMNTS wrote.

See also: Class-Action Lawsuit Dropped Against Wells Fargo, Zelle

Seattle resident Luke Hartsock had said he was scammed out of $7,500 in a case where the criminal said they were a Wells Fargo representative.

On Tuesday, June 28, Hartsock filed a notice of voluntary dismissal, with no reasons given.

Hartsock had been accusing the companies of failing to take action to protect customers beyond what they were obligated to do.

The complaint alleged that the banks were aware that Zelle was being used as a hotspot for fraud.