UK lost $33.2bn to frauds and scams in 2024 – the highest in Europe

The UK lost $33.2 billion to frauds and scams in 2024, according to Nasdaq’s latest Financial Crime Insights — the highest volume in Europe including the EU member states and Nordics countries, and equivalent to 1.05% of UK GDP. The UK also accounted for 32% of Europe’s total fraud losses, followed by France (24.9%) and Germany (12.7%).

According to the Nasdaq report, which was based on a survey of 270 industry professionals, the “highly interconnected” and “real-time” nature of payments in Europe has created a favourable environment for frauds and scams. Criminal networks are utilising the regionʼs payment rails to execute their illicit activities.

“[In the UK] fraud accounts for over 40% of crime but 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,” Janine Hirt, CEO of fintech industry body Innovate Finance, said in a statement accompanying a technology strategy to tackle fraud, published this week.

Speaking at the recent Pay360 conference, Carolin Gardner, head of the European Banking Authority (EBA) AML/CFT unit, said financial institutionsʼ lax use of technology exacerbated the situation. “One concerning thing we have spotted through our monitoring database Eureka [where national supervisors in the EU feed adverse inspection findings relating to financial crime] is that there is a sharp increase in enforcement cases for very serious shortcomings in financial institutions that use technology unthinkingly — and that has made financial crime risk exposure worse.”

Hybrid payments fraud

The UK struggles with payments fraud in particular, losing $29.7 billion last year alone.

Early evidence on the Payment Systems Regulatorʼs (PSR) authorised push payment (APP) reimbursement scheme, which came into force on October 7, 2024, is that this type of fraud is reducing. However the Nasdaq survey found a rising trend of “hybrid payment scams” across Europe whereby criminals combine multiple scam tactics together, which suggests they are adapting to regulatory change.

For example, one interviewee noted a rise in criminals in the UK manipulating victims and exploiting card payments to profit from scams. The fraudsters trick victims into using alternative payment methods to evade banks’ increased scrutiny of APP fraud.

Payments fraud contributed to the $88.3 billion of total bank fraud losses in the region, with $30.5 billion in bank fraud lost in the UK.

UK Finance also reported evidence of criminals deceiving victims into revealing one-time passcodes (OTPs) to authenticate online transactions in its half-year fraud report published last October. Criminals also exploit discount-seeking shoppers on social media by setting up fake sites and using the stolen card details to buy the items legitimately while keeping the customerʼs original payment.

“Criminals will keep adapting, which means we all need to remain focused on reducing fraud and thereby protect customers and society from the adverse effects of this awful crime,” said Ben Donaldson, managing director of economic crime at UK Finance.

AI-powered solution

However, Nasdaq said artificial intelligence (AI) technology offers a promising solution. With AI, machine learning and consortium data analytics, banks can streamline fraud detection and identify criminal connections across networks.

Innovate Finance calls for a new national anti-fraud centre as part of its technology strategy. With a goal to halve fraud in the UK by 2028, the blueprint proposes a “world-first data-sharing” approach across financial firms, regulators and law enforcement agencies, together with the anti-fraud tech industry.

Several financial institutions have already incorporated the use of AI in their daily operations. Mike Regnier, CEO of Santander UK, gave an example at Pay360: “We partnered with an organisation called Links and they have an amazing algorithm that takes every piece of customer data, every customer transactions, every known fraud vector thatʼs ever happened across the bank and in real-time, assessing every single payment whether it considers a potential fraud.”

The Nasdaq report found that 74% of respondents indicated they had plans to invest in AI technology, signalling a shift towards a data-driven approach to fraud prevention.

“The real challenge is that criminals are also using AI. We are seeing that with the rise of deepfake; we are seeing the rise of creation of more synthetic ID; we are seeing new ways of people attacking banks and institutions with cyber threats,” Regnier added. “It has given us a massive incentive to invest more in AI to stay ahead of the criminals.”