UK fraud losses surge as banks face new refund mandates

Industry data from UK Finance highlights a troubling rise in investment and purchase scams, with investment fraud alone hitting a record £221.5 million. While banks returned £354.3 million to victims, the burden remains heavily skewed toward financial firms. Ruth Ray, director of economic crime at UK Finance, pointed to the role of AI-driven social engineering, arguing that banks cannot stem the tide alone when the majority of these schemes begin on tech platforms or through telecommunications networks.

Pressure is mounting on companies like Meta, which has faced scrutiny over its inability to block illegal advertisements for high-risk investment products. Critics, including Innovate Finance CEO Janine Hirt, are calling for these platforms to share the financial burden of reimbursements and implement rigorous seller verification. As Frontier Economics prepares an independent review of the current refund regime due in July, the Payment Systems Regulator maintains that tech firms must accept greater responsibility for user safety to complement the steps already taken by the banking sector.