Investment scams saw a 34 per cent increase in losses in 2024 hitting £144.4mn, the first recorded rise since 2021.
The UK Finance Annual Fraud report revealed £1.17bn was lost to fraudsters overall in 2024 with 3.31mn confirmed cases.
Looking at investment scams specifically, cases fell by nearly a quarter in 2024 to 7,767, to the lowest since 2020, however losses were on the rise.
According to UK Finance the fall in cases and rise in losses marked a change in the profile of authorised push payment fraud compared with what it had observed in recent years.
Investment scams accounted for nearly a third of all APP losses last year, the data revealed.
“We noted last year that investment scams linked to cryptocurrencies have been on the rise and with increasing value and popularity, this is likely to be among the drivers of the loss increase in 2024,” the report explained.
UK Finance said it may see an upward revision to the 2024 data on investment scams as the data only reports closed APP cases but the nature of investment scams means it can take longer for some cases to be resolved.
Further data showed the reimbursement rate for investment scams in 2024 was 50 per cent, up from 34 per cent in 2020 with a total of £72.1mn returned to victims.
In addition, 53 per cent of investment scams originated online and 23 per cent via a telecommunications service or platform.
Erin Sims, financial services senior analyst at RSM UK, said: “Fraudsters are targeting more victims with increasingly sophisticated tactics.
“The rise in remote purchase fraud and the evolving nature of authorised push payment scams signal that criminals are adapting rapidly and leveraging scalable, low-cost tools to automate social engineering, mimic identities and exploit vulnerabilities at an unprecedented speed.”
According to Sims, to mitigate these threats, firms needed to invest in advanced technology and sustained customer education to “build resilience across all touchpoints”.
Martin Chapman, partner and national head of forensic services at Crowe, said: “Sophisticated frauds take time to work. For instance, a fraudster can sit in an IT system or gain access to passwords but wait to strike when the rewards can be the highest. This can result in a time-lag in detection.
“Fraud at this stage may initially look ‘non-monetary’, such as a data breach where the data hasn’t yet been used to bring financial gain. However, the stolen data may later be used for financial exploitation, meaning the true impact is delayed.
“So, although the data may not reflect an increase in fraud from previous years, from what I see and experience, fraud continues to grow and evolve faster than businesses and individuals can detect it.”
alina.khan@ft.com
