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Surge in UK fraud a national security threat, warn banks By Reuters

by Mike Robinson

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© Reuters. FILE PHOTO. The City of London’s financial district is visible as pedestrians walk on the South Side of the River Thames during the coronavirus (COVID-19), outbreak in London, Britain. March 19, 2021. REUTERS/Henry Nicholls/File Photo

By Iain Withers

LONDON (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.

The pandemic has seen financial fraud rise as consumers go online to shop and start investing and digital banking.

A Wednesday report by UK Finance revealed that 754million pounds of bank frauds were committed in this half-year, an increase of 30% over the 2020 period.

UK Finance reported that bank losses due to authorised push payments (APP) fraud, where customers are tricked into paying a criminal, rose 71% during the first half. This surpasses the total amount taken by card fraud.

The lenders are pushing for stronger fraud control by the government, regulators, and other industries, such as online platforms that fraudsters use to attack victims.

According to the report, 70% of APP scams were originated online. There has also been an increase in ads on online platforms targeting young people (as high as 14 years old) who are looking for “money mules” to illicit funds.

These findings are coming ahead of a questioning by executives from Alphabet (NASDAQ) Inc, Google (NASDAQ) Inc and eBay (NASDAQ) about their efforts to fight economic crime. The Treasury Select Committee in Britain will hold a hearing 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.

Katy Worobec (Managing Director for Economic Crime at UK Finance) stated in the report that “the level of fraud is such that they are now a threat to national security.” This cannot be solved by the banking sector alone.

The report stated that 736million pounds were prevented by bank security systems over six months.

Financial Conduct Authority, a watchdog that monitors investment fraud claims that nearly 570million pounds was lost by consumers to it in April. This is a figure that has tripled from 2018.

($1 = 0.7328 pounds)

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