Fraud in 2025: A Crisis of Scale, Speed, and Visibility

Fraud has evolved at a pace most regulatory systems, law-enforcement structures, and financial institutions have failed to match. What was once a niche financial crime has grown into a mass-market, industrialised criminal economy capable of inflicting systemic harm. Understanding the urgency behind the appointment of a Fraud Minister requires recognising the scale of the problem.

Over the last decade, fraud losses in the UK have doubled and the number of cases has tripled. In just the first half of 2025, £629.3 million was stolen across 2.09 million confirmed cases, representing a 3% rise in losses and a 17% increase in cases compared with the same period in 2024. For any UK adult over the age of 19, the risk of experiencing digital fraud now stands at around 7.5% per year, with scams occurring once or twice every second. Similar growth patterns can be seen in Europe, North America, and Asia-Pacific, where social media, instant payments, and cross-border mule networks are fuelling a truly global fraud economy.

• United Kingdom: Over £629 million stolen and more than 2 million fraud cases in H1 2025 alone, with fraud now representing a significant share of all recorded crime.
• European Union: Payment fraud losses running into billions of euros annually, with instant payments creating both opportunity and risk.
• Global picture: Scam losses estimated in the hundreds of billions of dollars each year, with AI-driven social engineering and investment scams growing rapidly.

The takeaway is clear: fraud is no longer merely a policing issue. It is a national infrastructure vulnerability. It undermines confidence in digital payments, erodes trust in institutions, and threatens the UK’s position as a global leader in financial services. The Fraud Minister’s role is being created against the backdrop of an industrialised criminal economy that moves faster than traditional structures were ever designed to handle.

Data Sharing, Regulation and Liability: Where the System Fails & Starts to Catch Up

Despite years of technical progress and investment in fraud tools, the UK’s single greatest barrier to effective fraud prevention remains its longstanding inability — or unwillingness — to share data across institutions in real time. This structural issue has allowed criminals to exploit gaps that should have been closed a decade ago, particularly in faster payments and cross-border transfers.

The 2015 Digital Policy Alliance (DPA) initiative with FIS Global and VocaLink illustrated what was possible. By analysing a single day of Faster Payments across several major banks, the team demonstrated that around 75% of fraud could be stopped immediately if key indicators were shared. They also uncovered eight mule networks in one day’s data. Yet the project stalled. Banks and PSPs were reluctant to share information with competitors, and a supervised fraud hub was rejected. Institutional incentives — protecting reputation and competitive advantage — prevailed over collective security.

• International contrasts: Thailand has enabled regulated real-time data sharing through a Royal Decree; Singapore and Australia have established national scam centres that integrate intelligence from banks, telecoms, and digital platforms.
• UK reality: Data remains siloed, and fraudsters thrive in the seams between banks, social media, telecoms, and law enforcement.
• Fraud Strategy 2023: The UK government’s Fraud Strategy aims to “stop fraud at source”, but delivery depends on overcoming entrenched resistance to data sharing and coordination.

Regulatory Momentum: Stablecoins, Identity and Instant Payments

Alongside data sharing, regulation is beginning to move in a more modern direction. New UK legislation governing fiat-backed stablecoins requires continuous monitoring of KYC and AML data, pushing firms away from static, point-in-time checks and towards dynamic risk profiling. This is essential when fraud and money laundering increasingly rely on digital wallets, crypto exchanges, and high-speed value transfers.

At the same time, enhancements to Confirmation of Payee (CoP) seek to close a long-abused loophole. For years, scammers relied on the fact that bank transfers did not require the real account owner’s name to match the stated payee. With CoP 2.0, banks must check that the name and account details align, making it harder for criminals to impersonate organisations like HMRC or banks by simply typing a plausible name into the payee field.

Liability as a Catalyst: The UK’s APP Reimbursement Rule

The October 2024 reimbursement rule for authorised push payment (APP) scams is one of the most consequential policy shifts in recent years. By requiring all banks and PSPs to reimburse innocent APP victims up to a maximum threshold per claim, the UK has created a powerful financial incentive for firms to strengthen fraud controls. Reimbursement rates have increased significantly, and industry-wide costs are estimated in the hundreds of millions of pounds per year.

International comparisons emphasise how important liability is in shaping behaviour. In the EU, customers still carry much of the liability for instant payments; in Japan, cultural expectations around family consultation and education play a major role, with regulators now requiring partial refunds for certain investment scams. In the UK, shifting liability onto institutions has turned fraud from a reputational risk into a balance sheet issue. That change alone justifies the need for a dedicated Fraud Minister to ensure incentives are aligned with national outcomes, not just individual firm interests.

Restoring UK Leadership and Building Real-Time Defences

The UK was once the undisputed leader in payment modernisation. The Faster Payments Service, launched in 2008, transformed domestic money movement and inspired similar infrastructures around the world. Yet over the past decade, that leadership has eroded as major programmes stalled and other jurisdictions accelerated their own initiatives.

The DPA fraud intelligence project, despite its compelling results, was not adopted at scale. The New Payment Architecture (NPA) programme, launched in 2018 to modernise UK payment rails, was paused in 2024 after years of investment and uncertainty. The New National Payment Plan announced in 2025 seeks to reset direction, but many in the industry remain unconvinced until concrete delivery milestones are met. Meanwhile, the Payment Association’s “Payments Manifesto 2026” reflects a sector impatient for structural reform, including clearer roles for law enforcement and more efficient triggers for fraud reporting and reimbursement.

Global Context: While the UK Hesitated, Others Advanced

While the UK wrestled with governance and programme complexity, other regions moved ahead. The EU’s Instant Payments Regulation makes instant transfers in euro a standard feature, with implementation deadlines driving rapid infrastructure upgrades, sanctions screening, and AI-enabled fraud detection. Several Asian markets have integrated real-time digital identity frameworks with payment systems, enabling stronger verification and anomaly detection at the moment of transaction. The US, historically slower in real-time payments, is now deploying FedNow and investing more heavily in fraud analytics.

The UK still has strong foundations — a sophisticated financial sector, a history of regulatory innovation and a deep ecosystem of fintech and regtech firms. But leadership can no longer be assumed. For Lord Hanson, restoring the UK’s position will require converting policy intent into operational coordination and ensuring that future programmes deliver tangible outcomes rather than extended roadmaps.

Real-Time Intelligence and Cross-Industry Coordination

Modern fraud is agile, distributed and increasingly powered by automation and AI. Criminals deploy scalable social engineering scripts, deepfake audio, spoofed caller IDs, cloned websites and global mule networks that move money across borders within seconds. Countering this threat demands real-time, intelligence-led defences that can detect risk as transactions are initiated, not days later in reconciliation reports.

Banks and PSPs must integrate high-volume streaming analytics, machine learning models that combine historical and live data, behavioural biometrics, and device-level telemetry. But criminals exploit the gaps between sectors: they rely on the fact that social media platforms are not tightly coupled to telecom data, that banks do not routinely share information with each other, and that law enforcement often receives incomplete or delayed intelligence. The Fraud Minister’s most critical task is to knit these disparate systems together so that information can flow faster than criminal funds.

If the UK can achieve genuinely real-time, cross-sector coordination — linking insights from social media, telecoms, banks, PSPs, law enforcement and public reporting — it will not only reduce fraud losses, but also set a new global standard for digital resilience and financial crime prevention.

Suggested Incentives and the Road Ahead

The long-term success of the UK’s fraud strategy depends on incentives that encourage cooperation rather than mere compliance. Industries respond to aligned economic signals. When incentives reflect national goals, coordinated behaviour follows; when they do not, progress stalls, however strong the rhetoric.

Banks and PSPs once had limited motivation to invest heavily in fraud prevention. Losses could often be pushed onto victims, and fraud incidents were handled quietly to minimise reputational damage. The new reimbursement regime has altered that equation. By placing liability directly on institutions, the UK has turned fraud from a public-relations issue into a financial and regulatory priority. Higher losses now translate into direct costs for firms, creating a strong business case for greater investment in AI systems, fraud operations teams, customer education and, crucially, intelligence sharing.

Social Media Platforms: Turning Vectors into Partners

With an estimated three-quarters of UK scams originating on social media or related online platforms, these companies sit at the front line of victim acquisition. Yet they currently face relatively limited regulatory and financial consequences when fraud proliferates via their services. The EU’s Digital Services Act, which allows for fines of up to 10% of global turnover for systemic failures, shows how potent meaningful penalties can be in changing corporate behaviour.

Introducing similar expectations in the UK would push platforms to strengthen identity verification, introduce more rigorous checks on advertisers, invest in scam-content detection and takedown, and collaborate more closely with banks and law enforcement. When inaction becomes expensive, prevention becomes a strategic imperative rather than a discretionary initiative.

Law Enforcement and the Courts: Speed as a Deterrent

Current delays of two to three years between arrest and court appearance in complex fraud cases erode deterrence. Fraudsters operate in a digital ecosystem where phones, SIM cards, social media accounts and bank details can be replaced in minutes. If the legal response takes years, the risk-reward ratio favours the criminal.

Accelerated fraud dockets, specialist economic crime courts, expanded digital forensics capability and better cross-border cooperation are all part of the solution. Increasing the likelihood and speed of detection and prosecution has more impact on criminal decision-making than simply increasing maximum sentences that are rarely applied.

Telecom Providers: Closing the Impersonation Loop

Telecom operators play a crucial role in stopping impersonation scams, which often rely on spoofed phone numbers and fraudulent SMS messages. Strengthened incentives could require real-time caller ID authentication, cross-network scam intelligence sharing, and automated blocking of known fraudulent numbers. Pre-answer warnings for suspected scam calls should become standard rather than exceptional.

By treating telecom data as a core part of the fraud intelligence picture, rather than an afterthought, the UK can significantly reduce the effectiveness of phone-based and hybrid scams that bridge online and offline channels.

Fraudsters: Raising the Probability of Detection

Criminals are rational actors within their own economic model. For them, the key calculation is not the theoretical maximum sentence, but the perceived probability of being caught and convicted. By shortening investigation timelines, improving evidence-sharing between agencies, and integrating analytics from banks, telecom providers and online platforms, the UK can materially increase the likelihood of detection.

These incentive structures are not simply punitive; they are corrective. They realign private-sector behaviour with public interest and national security. If implemented consistently and overseen by a minister with the authority to convene and challenge, they provide the missing architecture for a truly coordinated fraud prevention ecosystem.

The appointment of the UK’s first Fraud Minister is therefore more than symbolic. It represents an opportunity to turn scattered initiatives into a coherent, incentive-driven system that protects citizens, strengthens the economy and restores the UK’s reputation for leadership in financial innovation.

References

UK Finance (2025) Half Year Fraud Report 2025. Available at: https://www.ukfinance.org.uk/policy-and-guidance/reports-and-publications/half-year-fraud-report-2025.

UK Finance (2024) Annual Fraud Report 2024. Available at: https://www.ukfinance.org.uk/system/files/2024-06/UK%20Finance%20Annual%20Fraud%20report%202024.pdf.

Home Office (2023) Fraud Strategy: Stopping Scams and Protecting the Public. Available at: https://www.gov.uk/government/publications/fraud-strategy.

Home Office (2024) Fraud Factsheet. Available at: https://homeofficemedia.blog.gov.uk/2024/02/12/fraud-factsheet/.

Payment Systems Regulator (2024) PS24/7 Faster Payments APP Scams Reimbursement Requirement. Available at: https://www.psr.org.uk/publications/policy-statements/ps247-faster-payments-app-scams-reimbursement-requirement-confirming-the-maximum-level-of-reimbursement/.

Financial Conduct Authority (2024) GC24/5: Authorised Push Payment Fraud: Enabling a Risk-Based and Proportionate Approach. Available at: https://www.fca.org.uk/publication/guidance-consultation/gc24-5.pdf.

European Central Bank (2024) Instant Payments Regulation. Available at: https://www.ecb.europa.eu/paym/retail/instant_payments/html/instant_payments_regulation.en.html.

Global Anti-Scam Alliance (2024) Global State of Scams Report. Available at: https://www.gasa.org/post/global-state-of-scams-report-2024-1-trillion-stolen-in-12-months-gasa-feedzai.