Bank customers in the UK lost £500m in six months to scammers and fraudsters, figures have revealed.
Nearly a third of the money was lost in authorised push payment (APP) scams, which mean the customer has no protection to reclaim their losses.
Customers lost £145m through APP scams in the first half of 2018, while the other £358m was lost in unauthorised fraud and could be repaid.
Unauthorised fraud is when a transaction is carried out by the third party without permission being given by the account holder. Victims of this type of fraud have protection.
According to UK Finance, £30.9m of the £145m lost in APP fraud has been repaid to victims.
Experts are warning that scams are funding terrorism and crime and pose a threat to the UK.
The most prevalent type of APP scams are classified as “purchase scams”, where customers are duped into paying in advance for goods or services, like a holiday or car, which is not received or does not exist.
It often takes place online, through auction sites or on social media.
There were also 3,866 reported cases of impersonation scams, where the criminal claims to be from the police, the customer’s bank or an organisation to trick the victim into sending over money.
The average loss to these types of scams is £11,402.
Katy Worobec, managing director of economic crime at UK Finance, said the scams are a “major threat”, adding: “The criminals behind it target their victims indiscriminately and the proceeds go on to fund terrorism, people smuggling and drug trafficking, whether or not the individual is refunded.”
She said the industry is taking steps to tackle the problem, but Which? says banks’ efforts have been “woefully inadequate”.
Gareth Shaw, a money expert at the consumer group, said: “It’s now two years since our super-complaint highlighted the lack of protection for victims of bank transfer scams, but these shocking figures show just how widespread the problem still is.
“Banks… have not done enough to protect their customers, who continue to lose life-changing sums of money to ever-more sophisticated crooks.”