Criminals stole £1.28 billion through payment fraud in the UK in 2025, marking a 4% increase from the previous year and the second straight annual rise. The figures, published in the 2026 Annual Fraud Report by UK Finance in partnership with Nasdaq and BioCatch, underline how quickly economic crime is evolving and how fraud risks are spreading beyond the banking system.
While banks blocked £1.68 billion in attempted fraud during the year, industry leaders warn that financial institutions can no longer act as the country’s primary line of defence on their own. Fraud tactics are changing, and responsibility is increasingly shifting toward technology platforms, telecom providers, and policymakers.
Shift
The report shows a clear transition away from traditional account takeovers toward scams that manipulate human behaviour. Unauthorized fraud losses, where criminals act without the victim’s knowledge, fell 5% to £703.4 million. Despite that decline, overall fraud cases jumped 11% to a record 3.81 million incidents.
Kamlesh Harry, Principal Strategic Advisor of Fraud Solutions at Nasdaq Verafin, said stronger security controls have made direct system breaches harder. Banks now use layered checks that flag unfamiliar devices and suspicious logins, reducing the usefulness of stolen static credentials.
As a result, criminals are turning to social engineering. Victims are tricked into sharing one-time passcodes, which are then used to register digital wallets or approve fraudulent payments. Remote purchase card fraud rose 13% to 3.2 million cases, with losses totaling £423.5 million.
Growth
Authorized Push Payment fraud showed the sharpest increase. Losses climbed 19% to £576.4 million across more than 248,000 confirmed cases. These scams involve convincing victims to approve payments themselves, often under false pretences.
Harry noted that these attacks are highly persuasive and often originate overseas. The widespread use of English makes UK consumers particularly vulnerable to scams launched from outside the country.
While consumer education tools such as Confirmation of Payee have reduced some traditional redirection scams to record lows, new forms of deception are filling the gap. Malicious payee scams, where victims are manipulated into paying for non-existent goods or investments, rose sharply.
Platforms
Investment fraud losses surged 40% to £221.5 million, the highest total of any category. Purchase scams increased 20% to £118.1 million and accounted for 71% of all APP fraud cases. Romance fraud also rose 23% to £39.2 million.
Much of this activity is linked to fraudulent advertising and impersonation on online platforms. According to the report, 66% of APP fraud cases originate online, accounting for 32% of losses. Telecom networks are involved in 17% of cases but are disproportionately used for high-value impersonation scams, representing 28% of total losses.
Technology
As criminal groups industrialize their operations using deepfakes, synthetic identities, and automated AI tools, financial institutions are responding with more advanced detection systems.
Harry described AI not as a single solution but as a core component that must be integrated throughout fraud defences. At Nasdaq Verafin, fraud detection and anti-money laundering tools are combined with consortium data that allows banks to share anonymized risk insights across borders.
However, Harry emphasized that automation must be governed carefully. He said AI systems used in fraud prevention must meet three standards: transparency in how models operate, explainability in why decisions are made, and auditability to satisfy regulatory scrutiny.
Limits
Mandatory reimbursement rules returned £354.3 million to APP fraud victims in 2025, covering 61% of losses. Even so, industry leaders caution that refunds do not address the underlying problem.
Harry pointed out that reimbursement rules apply only within the UK and do not protect cross-border payments. Larger organizations with payments above £2 million are also excluded from these protections.
Policy
The report calls for broader accountability across sectors. Recommendations include requiring online marketplaces to verify sellers and restrict off-platform payments, obligating regulators to impose stricter controls on high-risk advertising, and asking technology and telecom firms to contribute financially to fraud prevention efforts.
Ruth Ray, Managing Director of Economic Crime at UK Finance, wrote that while banks remain global leaders in fraud prevention, responsibility must be shared in practice. Without coordinated action across finance, technology, telecoms, and law enforcement, fraud losses are likely to continue rising.
The data suggests that fraud is no longer just a banking issue. As scams increasingly begin on digital platforms and communication networks, effective prevention will depend on how quickly those sectors are brought into the fight.
