Scams, Cons and Compensation

Catherine, the big highlight from the report from yourselves is another increase in the amount of money which has been stolen by scammers.

So up to 1.3 billion in a year.

I think there was a 19% rise in APP fraud.

What's going on? Why is fraud still going up so much?

Yeah, thanks, and, and thanks for inviting me on to talk about it.

Yeah, I mean, the stats there, and that particular one you quote, the 19% rise in, in APP fraud losses, that's pretty staggering when you think about it, and I think it's driven by a number of different things.

I think if you get down into the data and into the detail of it, you can see that a lot of that is driven by investment scams and romance scams, and these are really the kind of big-ticket frauds that, yeah, people lose hundreds of thousands to, their life savings to.

They quite often are quite complicated, and they have quite a long duration.

And our data records the point at which a bank became aware of a scam.

So, yeah, some of these investment frauds could've been running for years before the victim realized that they were the victim of a fraud and reported it to their bank.

So there is a slight timeline potentially with some of the data.

But yeah, I mean, we can see really that particular types of frauds have really escalated over the last year or so, and, and that's, you know, due to a number of pressures.

I think when you're looking at, particularly when you look at investment frauds, I don't think you can ignore the fact that pressures from the cost of living, pressures to get return on your, on your money, to look for the next big thing to invest in, whether that's crypto or something else.

Overseas property is one that comes up quite often as well.

You know, people are looking to make money when they are struggling to make ends meet, and I think that is a real driver of people, you know, being targeted by scammers, by these, you know, the, these kind of fraudulent adverts, telephone calls, fake investment opportunities.

Criminals know that people want- To make that return, and they're really able to tap into people's, you know, the financial pressures on people.

You know, the fear of missing out on an opportunity, the fact that other people seem to be investing and seem to be making huge returns.

You know, in fact, you see loads of social media pictures and, you know, videos, things on, on different platforms, you know, kind of extolling the benefits of some of these fraudulent investment schemes, and it makes it feel very attractive, particularly when people are under such huge financial pressure.

And then there's obviously the question around AI as of late because it's been cited constantly in terms of driving fraud and scams.

To what extent has AI fueled the recent kind of surge in fraud?

So AI, I think, has been a huge driver.

I think what we don't necessarily have is the data to evidence what percentage of these frauds that we're seeing are involve AI because I think victims don't often know that, to be honest.

But I think certainly talking to member firms of UK Finance who are involved in investigating frauds on a daily basis, I think the suspicion is that AI and AI-generated content is a huge part of that.

And I think we can see what it's doing is really industrializing this business, this industry.

It allows fraudsters to create believable, authentic content really quickly, and that includes, like, you know, websites for example.