Spirit of openness helps banks get serious about stopping scams
Three announcements in the space of a few days this month suggest financial scams have reached a tipping point and banks are ready to up the ante.
Santander last week published figures on the amount of money scammed from its UK customers in the first three months of this year. According to the bank, its customers lost £18.4m to fraudsters during the period. To put that into perspective, this is just one bank, and the figure only covers the UK.
Such scams – which usually originate from criminals using social media and digital communications apps – cost the UK £11.4bn in 2024, according to figures from the Global Anti-Scam Alliance. This is equivalent to 0.4% of UK GDP, with the average loss per victim standing at £1,443.
UK Finance numbers show more than £1bn was lost to fraud – including scams – in 2023, with 40% of all crimes in the UK being scams or fraud. It found that more than three-quarters (76%) of authorised push payment (APP) fraud starts online and 16% starts through telecommunications networks.
Action against scams
The very fact that Santander has committed to publishing these figures reflects the seriousness of its drive to stop scams. This is the first Santander Quarterly Scamtracker, which not only drills home the message to customers to be aware, but also highlights particular scams. For example, in the first instalment, it warned customers to be aware of a scam using fake Sports Direct adverts to defraud people.
Santander’s announcement came as Stop Scams UK announced that banks and tech firms have agreed to share data on fraud.
Banks HSBC, NatWest, Monzo, Lloyds Bank and Santander, together with tech firms Amazon, Google and Meta, and mobile telecommunications firm Three and BT, are among the signatories of a Stop Scams UK joint statement.
Stop Scams UK said: “Fraudsters jump across channels as they entice and snare their victims, but most organisations can’t see what is happening to block it or warn consumers. Through sharing intelligence, focusing resources and developing straightforward, actionable communication strategies, we can protect consumers from evolving scam threats and empower them to protect themselves better.”
While banks are trying to be more open about the problem, victims – who are often traumatised by the experience – are not reporting scams.
The Global Anti-Scam Alliance said 71% of Brits did not report them in 2024, which was an increase from the previous year.
Of those that were reported, it said shopping scams remained prevalent in the UK, and there was a rising number of investment scams, which exploit victims through credit cards, bank transfers and online payment platforms.
But banks can’t tackle this alone. Tech companies, which host the platforms often used by scammers, have agreed to share data and take action.
Beyond that, UK fintech trade body Innovate Finance last week called for support from the government in the form of a national centre to help businesses across different sectors fight fraud through data sharing.
Janine Hirt, CEO of Innovate Finance, said that while fraud accounts for over 40% of crime, it receives less than 1% of police resources. “Given the scale of the threat posed to consumers and businesses alike, we urgently need a more collaborative, targeted and effective strategy that aspires to smash fraud in the UK,” she said.
Economic impact of fraud
The government has a vested interest in cutting scams. It is not just people who fall victim to scammers that suffer, but the UK economy. According to Innovate Finance, payment fraud costs the economy at least £1.2bn annually.
One IT professional in the UK banking sector, who wished to remain anonymous, said banks are realising that scams are a very big problem for them as they have to reimburse customers in some cases, even if the loss is no fault of the bank.
“That means banks cannot control this form of loss as it depends on customer behaviour and regulations, neither of which banks have direct control over,” he said. “The only option is to find a way to educate customers and try to spot scams before they cause customers to generate losses for the banks.”
He said collaboration between banks and online retailers is an “excellent idea” and hoped government anti-cyber crime and anti-fraud intelligence agencies can also take part.
“I notice the banks have been updating their cyber scam policies recently, and there are numerous warnings when you try and make a payment online, so it feels like the scam issue is getting a lot more focus,” he added.
Metro Bank is an example. It is using artificial intelligence (AI) to help customers spot scams, through AI scam detector platform Ask Silver. The technology enables personal and business customers to instantly check whether they are at risk of a scam.
The bank said: “Using their phone or tablet, customers can now simply take a photo or screenshot of any email, website, letter or leaflet they are suspicious about and, using the Metro Bank Scam Checker, send it via WhatsApp. Ask Silver will then use the power of AI to spot if the communication is fraudulent and provide suggestions for next steps on staying safe – in just minutes.”
Baz Thompson, head of fraud at Metro Bank, said it takes the security of its customers very seriously and constantly reviews how it can help them fight fraud. “Criminals often play on urgency and speed to trick people into parting ways with their hard-earned cash. Being able to offer a service where customers can know in minutes whether something is fraudulent provides an essential barrier to staying one step ahead of fraudsters,” he said.
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