Criminals Successfully Embezzle £144 Million through Investment Scams - Amidst Drop in Reported Incidents
Millions More Fall Victim to Investment Fraud in 2024 as Cases Decrease
According to newly released data, £144.4 million was stolen through investment fraud in 2024, marking a substantial increase of 34% compared to the previous year. Despite recording a 24% decrease in reported cases, the monetary loss demonstrates a worrying trend.
Investment fraud takes place when an offender convinces their target to transfer funds to a non-existent investment or to pay for an investment that does not exist, as in cases where false promises of enormous returns are made. The wide range of investments that can be targeted is a concerning factor, with potential prey including equities, commodities such as gold, property, cryptocurrencies, or even wine.
Overall, fraudsters stole a total of £1.17 billion in 2024, which is comparable to the amounts lost in 2023. There were 3.31 million confirmed cases of fraud, a 13% rise since the previous year.
The growth of investment scams being boosted on social media platforms through AI 'deepfaking' was highlighted by our website in April. This involves fraudsters misusing the reputations of prominent figures for criminal purposes.
Unauthorised fraud emerged as the most prevalent type of fraud in the UK, making up around 3.13 million cases last year, a 14% increase from the previous year, with associated losses amounting to around £722 million. Card fraud proved the most common form of unauthorised fraud, with more than 3 million people defrauded of over £572 million in 2024, a 15% increase from the previous year.
While unauthorised fraud cases continue to escalate, Authorised Push Payment (APP) fraud witnessed a decline in 2024, with losses dropping by 2% to £450.7 million. APP fraud is conducted when victims are tricked into making authorized transfers, often via bank transfer, under false pretenses such as fake invoices or romance scams.
Although the amount of fraud being stopped by the financial services industry has risen year-on-year, the figure reached in 2024 amounts to £1.45 billion, marking a 16% increase compared to 2023. This suggests that automated systems designed to identify and flag potentially fraudulent activities are becoming more efficient.
The Take Five to Stop Fraud campaign, endorsed by UK Finance, advises consumers to be cautious when participating in transactions and to immediately report any suspected scam to Action Fraud (0300 123 2040) or by filing a report online at actionfraud.police.uk. Individuals are also encouraged to contact their bank as soon as they suspect they have fallen prey to a scam.
[1] 'Fraud Landscape in the UK', UK Finance (November 2022), https://www.ukfinance.org.uk/about-us/publications/reports/fraud-landscape-in-the-uk[2] 'Statement on basis of competition claims for reimbursement of APP fraud, and offer of support', The Open Banking Implementation Entity (November 2022), https://www.openbanking.org.uk/news/statement-on-basis-of-competition-claims-for-reimbursement-of-app-fraud-and-offer-of-support/[4] 'Reporting fraud and cyber crime in England, Wales and Northern Ireland', Action Fraud (n.d.), https://www.actionfraud.police.uk/reporting-fraud-and-cyber-crime[5] 'Authorised Fraud Statistics', UK Finance (2024), https://www.ukfinance.org.uk/about-us/publications/reports/authorised-fraud-statistics
[1] Although gold was not specifically mentioned in the fraud cases, it is important to note that gold is often used as a commodity for investment and can be targeted by fraudsters.
[2] The majority of the investment fraud cases in 2024 related to equities, but some cases also involved other types of property investments, such as real estate and cryptocurrencies.
[3] In the general news and crime-and-justice sector, the increasing trend of investment fraud, including cases of using AI 'deepfaking' on social media platforms, has raise concerns for regulators and financial experts alike. The continuous growth of these scams poses a threat to the finance and investment industry, as well as to the general public.
