Over a Third of UK Citizens Fail to Retrieve Funds Stolen in Fraudulent Schemes
In a recent survey by Yaspa, open banking-based payments, specifically "Pay by Bank" systems, have been identified as the most effective fraud-resistant payment methods. These systems reduce the risk of fraud by moving money directly between bank accounts with strong customer authentication and without exposing sensitive card details [1][2].
The survey highlighted that push payment fraud, often linked to bank transfers, is highly damaging because lost funds are rarely recovered. Pay by Bank offers better safeguards against this by using open banking technology [1]. Open banking eliminates the need for sharing card details and intermediated authorization that are vulnerable to scams. It enables real-time confirmation, encrypted data handling, and streamlined identity verification, which can help prevent fraudulent transactions upfront [2].
Online mediums emerged as the most common places for fraudulent activity, with online shopping scams, phishing emails, and Facebook Marketplace scams considered the most common. Interestingly, nearly 24% of Brits believe ticket buying for concerts and sporting events is the most common platform for fraudulent activity or scams [1][2].
The survey also found that about one-third of respondents believe improvements in fraud detection technology are the best way to protect consumers, highlighting the role of modern payment innovations in combating scams [1][2]. However, almost 40% of those surveyed don't agree that the government and its agencies are doing enough to protect consumers from fraudulent activity [1].
Financial losses were highest in Northern Ireland, with an average of £2290 lost due to fraud in the last 12 months. On average, consumers in the UK lose £765 to scams, with the average percentage of lost funds recovered being 34% [1]. Amie Kadhim from Yaspa highlights Pay by Bank as an alternative technology to reduce the risk of financial loss as a result of fraud [1].
The survey found that 35% of respondents were a victim of fraud in the last 12 months, equivalent to around 17.5 million people [1]. Younger people (16-24 year olds) lost an average of £284 in scams and fraudulent activity, while all other age groups lost between £750 and £900 on average [1].
Over half of Brits (54%) believe it is easier to scam people today than 5 years ago [1]. Concerns about becoming a victim of fraud are high, with 70% of respondents expressing worry about them or a loved one becoming a victim in the next 12 months [1]. The survey also revealed that 40% of Brits who have experienced fraud or scams in the last year haven't been able to recover the money lost [1].
In conclusion, Pay by Bank and open banking-powered payment options stand out as fraud-resistant solutions that provide stronger identity verification and reduce exposure to fraud compared to traditional card payments [1][2]. As the digital landscape continues to evolve, it is crucial for consumers and businesses to stay vigilant and adopt secure payment methods like Pay by Bank to protect themselves from fraud.
References: [1] Yaspa. (2022). Yaspa Survey Reveals Pay by Bank as a Fraud-Resistant Solution for Brits. Retrieved from https://www.yaspa.com/news/yaspa-survey-reveals-pay-by-bank-as-a-fraud-resistant-solution-for-brits
[2] Yaspa. (2022). Yaspa Survey: Open Banking-Based Payments Reduce Fraud Risk. Retrieved from https://www.yaspa.com/news/yaspa-survey-open-banking-based-payments-reduce-fraud-risk
The survey indicates that Pay by Bank, a form of open banking-based payment, offers better safeguards against push payment fraud and financial loss, highlighting its potential role in combating scams within the finance sector [1]. Furthermore, open banking eliminates vulnerable intermediary authorization points and provides stronger identity verification, real-time confirmation, encrypted data handling, and streamlined fraud detection, making it a viable option for businesses aiming to reduce fraud risks [2].
