New industry figures show that more than £1.3 billion was lost to fraud and scams in 2021.
UK Finance shared the numbers, including £730 million lost to authorised and fraudulent losses across payment cards, remote banking and cheques.
These fraud cases involve the account holder not authorising the transaction, which is carried out without their knowledge.
Another significant type of scam was authorised push payment (APP) fraud, with total losses of £583 million.
Around 40% of APP fraud involves impersonation scams, where the fraudster tricks their victim into thinking they are a banking, tax or police official.
There were 195,996 incidents of APP fraud in 2021.
Despite the widespread nature of these scams and significant losses, victims could only recover £271 million in lost funds, as banks do not always reimburse their customers.
Last year, fraudsters impersonated various organisations, including the NHS, banks and government departments, using a range of channels, including phone calls, text messages, emails, fake websites and social media posts.
Scammers tricked their victims into handing over personal and financial information, which fraudsters then used to steal their money.
UK Finance said that around £215 million was lost last year to impersonation scams, the largest category of APP fraud losses.
Investment scams were the second largest category of APP losses, with £171 million lost last year.
The UK’s most common fraud last year was the purchase scam, with customers conned into paying for goods and services that are never delivered.
UK Finance reported nearly 100,000 cases of purchase scams last year, accounting for 51% of all scams with total losses of £64 million.
Katy Worobec, managing director of Economic Crime at UK Finance, said:
“Fraud has a devastating impact on victims and the money stolen funds serious organised crime, as well as imposing significant costs on the wider economy.
“Unauthorised fraud losses fell last year, but this type of criminal activity remains a major problem. Through the introduction of new measures such as strong customer authentication, coupled with continued investment in technology, the banking and finance industry prevents significant amounts of fraud from taking place.
“Authorised fraud losses rose again this year as criminals targeted people through a variety of sophisticated scams, with much of the criminal activity taking place outside the banking sector, often involving online and technology platforms. This is why we continue to call for other sectors to play a greater role in helping protect customers from the scourge of fraud.
UK Finance is urging customers to follow the advice from its Take Five to Stop Fraud campaign:
· Stop: Taking a moment to stop and think before parting with your money or information could keep you safe.
· Challenge: Could it be fake? It’s ok to reject, refuse or ignore any requests. Only criminals will try to rush or panic you.
· Protect: Contact your bank immediately if you think you’ve fallen for a scam and report it to Action Fraud.