Unveiling digital fraud: Insights into scam trends and prevention in the UK payment sector

January 3 2025

by Payments Intelligence

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What is this article about?

An examination of authorised push payments (APP) scams in 2023, their impact on victims, and the platforms most exploited.

Why is it important?

Over £340 million was lost to APP scams, affecting trust in payments and digital platforms.

What’s next?

Stronger fraud detection and better industry collaboration are needed to protect consumers

The Payment Systems Regulator’s (PSR) findings in its December’s Unmasking how fraudsters target UK consumers in the digital age report reveal a stark picture of the growing threat posed by authorised push payment (APP) scams. Drawing on comprehensive data from the 14 largest banking groups in Great Britain and Northern Ireland, the insights provide an in-depth examination of the tactics fraudsters use, the platforms they exploit, and the devastating impact these scams have on victims. Over 222,000 cases were reported in 2023 alone, highlighting the scale and evolving nature of the challenge faced by regulators, payment systems, and consumers alike.

Social media platforms, telecommunications channels, and even search engines have become key tools for fraudsters to target unsuspecting victims. Fraudsters leverage popular platforms to facilitate scams such as fake purchases, investment fraud, and impersonation of trusted entities. The volume of incidents, paired with the financial losses that exceeded £340 million in 2023, underscores the sophistication and adaptability of scammers.

The impact of these scams extends beyond financial losses, undermining public confidence in digital platforms and payment systems while leaving victims with lasting emotional and psychological scars. Addressing these vulnerabilities demands collaboration across financial institutions, digital platforms, and regulators. Enhanced fraud detection systems, stronger preventive measures, and consumer education are essential steps to counter the growing risks of APP scams.

Critical findings

Fraud in the Digital Age
Over 222,000 APP scam cases were reported in 2023, causing significant financial and emotional harm. Fraudsters are exploiting digital platforms on an unprecedented scale
The Rising Scale of APP Scams
With total losses to victims exceeding £340 million in 2023, APP scams have become a significant threat to the UK payment system.
Social Media: A Fraudster’s Playground
Over 50% of scams by volume occur on platforms like Facebook, Instagram, and WhatsApp, where fake profiles and deceptive ads lure victims.
Telecommunications: High-Value Fraud
Over 30% of total scam value comes from telecom platforms. Fraudsters impersonate banks, police, or officials to manipulate victims into transferring large sums.
Other Channels Exploited
Email services and search engines are targeted via phishing emails and fraudulent ads, redirecting victims to fake websites or impersonated organisations.
Victims Face Long-Lasting Impact
Beyond financial losses, victims experience stress, psychological harm, and a loss of trust in digital systems.
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Fraud in the digital age has reached unprecedented levels, with APP scams dominating as one of the most harmful and widespread threats. Here are the key takeaways:

  • Over 222,000 cases in 2023: APP scams caused significant financial and emotional harm, affecting thousands of victims across the UK.

  • Social media platforms as prime targets:

    • Over half of APP scams by volume occurred on platforms like Facebook, Instagram, and WhatsApp.
    • Fraudsters exploited these platforms through fake profiles, deceptive advertisements, and counterfeit listings.
  • Telecommunications providers heavily exploited:

    • Represented over 30% of the total value lost to scams.
    • Frequently used for high-value impersonation fraud, with scammers posing as trusted entities like banks or government officials.
  • Other platforms also affected:

    • Search engines and email services are commonly used for phishing schemes and fraudulent advertisements.
    • These scams lead victims to fake websites or organisations, further broadening the threat.
  • Financial and emotional toll:

    • Victims often experience not only financial losses but also long-lasting stress and psychological harm.

Voices from the industry

Scam types and platforms

The landscape of APP scams in 2023 reflects the diverse strategies used by fraudsters to exploit both individuals and businesses. Purchase scams dominated APP fraud by volume, making up 68% of all reported cases. These scams, often targeting consumers on social media marketplaces or fake websites, amounted to over £72 million in losses. With an average loss of £476 per victim, purchase scams may seem relatively low-cost individually, but their sheer prevalence underscores the importance of consumer vigilance when shopping online.

Investment scams, though fewer in number (6% of cases), inflicted the greatest financial damage, with total losses exceeding £80 million. Fraudsters frequently lure victims with promises of high returns on fake investment opportunities, often promoted via social media or fraudulent advertisements. The average loss per victim was £6,422, reflecting the high stakes and credibility fraudsters establish in these schemes.

Impersonation scams, a category divided into two main subtypes, highlight the power of trust exploitation. Scammers posing as police or bank staff accounted for 4% of cases but caused losses of over £64 million, with an average victim loss of £6,441. Meanwhile, general impersonation scams, where fraudsters claim to represent various trusted entities, made up 10% of cases, leading to £42.8 million in losses.

Smaller but equally damaging scams include romance scams, which target emotional vulnerability and trust. While these accounted for just 2% of cases, they caused £22.8 million in losses, with victims losing an average of £4,555. Similarly, invoice and mandate fraud, primarily targeting businesses, caused £28.4 million in losses despite representing only 1% of incidents. Each case carried an average loss of £14,469, highlighting the financial risks organisations face from this type of fraud.

At the lower end of the spectrum, advance fee scams caused £25.8 million in losses, targeting victims with promises of loans, prizes, or services in exchange for upfront payments. Though less damaging on an individual basis (average loss £1,336), these scams thrive on volume and quick, low-risk gains for fraudsters.

APP fraud (volume)

The volume of APP scams in 2023 highlights the widespread exploitation of digital platforms by fraudsters. According to the data, social media, messaging, and call platforms were the most targeted, accounting for 55.7% of total APP scam cases. Within this category, Facebook alone was the leading platform, representing 33.7% of the total cases. Instagram, WhatsApp, and Snapchat also ranked highly, indicating that fraudsters leverage the extensive reach and trust inherent in social networks to deceive victims.

Telecommunications platforms were the second-largest category by volume, contributing to 12.1% of reported scams. This includes scams executed via text messages and phone calls, where fraudsters often impersonate trusted entities such as banks or government agencies. Despite being smaller in overall share, these scams often have a higher success rate due to the perceived legitimacy of the communication.

Entity Unknown scams accounted for 8.8% of the total volume. These cases typically occur when victims are unable to identify the origin of the fraudulent interaction, highlighting the challenge of tracing and attributing fraudulent activities. Auction and purchase platforms, such as Facebook Marketplace and others, comprised 7.4% of total cases. Fraudsters frequently use these platforms to create fake listings, preying on unsuspecting buyers.

Search services like Google were exploited in approximately 0.8% of cases. Although a smaller proportion, these scams often involve fraudulent advertisements or phishing links that redirect users to malicious sites.

Finally, dating platforms, though representing just 0.6% of total APP scam volume, were instrumental in romance scams. These scams, while less frequent, carry significant emotional and financial consequences for victims.

APP fraud (value)

The financial toll of APP scams in 2023 underscores their devastating impact on victims and highlights the platforms most exploited by fraudsters. Telecommunications platforms were responsible for the largest share of losses, representing 31.3% of the total value lost, amounting to over £106 million. This category, often involving impersonation scams where fraudsters pose as trusted entities such as banks or police officers, leads to high-value transfers and significant financial harm.

Social media, messaging, and call platforms followed closely, contributing to 19.8% of the total value lost, amounting to £67.4 million. Within this sector, Facebook accounted for £30.8 million, making it the single most financially exploited platform. Instagram and WhatsApp were also heavily targeted, with combined losses exceeding £17 million, particularly in scams involving romance, investment, and advance fees.

Entity Unknown scams represented 16.4% of total losses, indicating the difficulty victims face in identifying the origin of fraudulent activity. The lack of clarity highlights a significant challenge in combating fraud and improving accountability. Auction and purchase platforms, such as eBay and Facebook Marketplace, contributed 6.2% of the total value lost, showcasing the prevalence of purchase scams where victims pay for goods that are never delivered.

Dating platforms, although representing only 3% of total financial losses, were heavily exploited in romance scams, with Match.com and Plenty of Fish among the affected platforms. These scams often result in substantial emotional and financial harm.

Search services, including Google and other unknown platforms, accounted for 2.3% of total losses. These scams often involve fraudulent advertisements or phishing schemes, leading victims to transfer funds under false pretenses.

Scam by sector

The analysis of APP scams by sector reveals significant variation in the methods and platforms exploited by fraudsters. Social media, messaging, and call platforms dominate in terms of volume, accounting for 56% of all reported cases. This highlights the role of popular platforms such as Facebook, Instagram, and WhatsApp, where fraudsters leverage trust and reach to deceive victims. These platforms are often exploited for purchase scams, romance scams, and investment scams, demonstrating the adaptability of fraudsters to target users across different contexts.

Auction and purchase platforms, including Facebook Marketplace and eBay, represent 13% of scam cases. Fraudsters often use these platforms to create fake listings, tricking consumers into paying for goods or services that never materialise. While their volume is lower than social media, the financial losses in this sector remain significant.

Telecommunications platforms account for 12% of scam cases but represent the highest financial impact. Fraudsters primarily exploit phone calls and text messages to impersonate trusted entities such as banks or government agencies, often convincing victims to transfer large sums of money.

The “Entity Unknown” category accounts for 9% of cases, reflecting instances where victims are unsure about the origin of the fraud. This underscores the importance of improving fraud detection and tracking systems to better understand and address these scams.

Search services, family/friend impersonation, email, and dating platforms collectively make up the remaining cases. Email scams account for 2% of cases but contribute disproportionately to financial losses, often through invoice or phishing scams targeting businesses. Meanwhile, dating platforms, though smaller in volume at 1%, are key channels for high-impact romance scams, which cause significant emotional and financial harm.

APP scam impact on victims

The effects of APP scams extend far beyond the financial losses experienced by victims, creating ripples of emotional, psychological, and societal harm. According to the PSR’s survey of 688 victims, the consequences are multifaceted and long-lasting. Victims often lose confidence in the safety and security of payment methods. The survey revealed that 32 percent of respondents were less willing to adopt new payment systems, such as mobile wallets or peer-to-peer payment apps, following their experience. This hesitation poses challenges for innovation and the broader adoption of digital payment technologies.

Around 36 percent of victims stated that they were less likely to explore new approaches to managing their finances, such as online banking tools or investment platforms. This reluctance often stems from fears of being targeted again or encountering further security vulnerabilities. APP scams have also affected consumer behaviour, with 48 percent of victims reporting a reluctance to shop with new or unfamiliar retailers. This wariness can hinder the growth of small businesses and emerging e-commerce platforms that rely on building trust with first-time customers. 

Beyond practical concerns, the emotional aftermath of APP scams can be severe. Victims frequently report feelings of guilt, shame, and vulnerability, which can deter them from seeking assistance or sharing their experiences.

In extreme cases, the stress caused by financial loss and manipulation leads to long-term mental health struggles. The PSR’s data highlights a significant disparity in satisfaction levels between banks and platforms where scams occurred. Victims reported much higher satisfaction with their banks’ responses compared to digital platforms and services. Specifically, 53 percent of victims were very satisfied with their banks’ responses, while only 10 percent felt the same about platforms. Similarly, 39 percent of victims were very dissatisfied with platform responses, compared to just 8 percent for banks. This stark contrast underscores the need for digital platforms to adopt more robust measures to prevent fraud and support victims effectively.

APP scams also harm public confidence in digital ecosystems, with ripple effects on sectors ranging from e-commerce to financial technology. When consumers and businesses alike hesitate to engage in digital transactions, it stifles growth and innovation in the broader economy

The position of The Payments Association

The Payments Association (TPA) has engaged with the government and regulators to represent its members’ perspectives on APP fraud, as widely reported by the media. Advocacy efforts have centred on three key policy areas regarding the rules implemented on 7 October 2024: the threshold (which was reduced), the definition of consumer standard of care, and the involvement of social media platforms.

The previous government’s approach to social media involvement, outlined in its online fraud charter, was limited in scope. Discussions with Labour Party representatives before the general election suggested the potential for policy adjustments to increase the responsibilities of social media companies in addressing APP fraud. While these discussions raised expectations within the industry, no significant changes have been implemented to date.

Recently, Meta introduced the Fraud Intelligence Reciprocal Exchange (FIRE) programme, allowing banks to share intelligence directly with the company to help combat scams on its platforms. The initiative has been positively received as a step forward; however, many within the industry consider it insufficient to address the broader issue of social media platforms’ role in tackling fraud.

The FIRE programme does not impose financial liability on social media platforms, with the financial burden remaining largely on payments firms. The TPA continues to engage with regulators and policymakers, advocating for a more balanced approach that better distributes responsibilities and ensures the involvement of all relevant stakeholders in combating APP fraud.

Final observations

APP scams continue to illustrate the complexity and adaptability of fraud in the digital age. The widespread exploitation of social media, telecommunications, and other platforms highlights how fraudsters leverage trust and scale to deceive victims. With over £340 million lost and victims reporting significant financial and emotional harm, the data underscores the systemic vulnerabilities across sectors. These scams have left a lasting impact on consumer confidence and digital engagement, demonstrating the pressing need for further study and cross-industry collaboration to understand and address these challenges effectively.

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