There are many drivers of financial crime and several parties who can affect its prevalence and impact on victims. Achieving our outcomes depends on those partners working together and taking actions, as well as us. The Government has published the Economic Crime Plan 2 and its fraud strategy[1], which will underpin the continued drive nationally to reduce financial crime in the UK.
Where our powers and remit mean we can have an impact on investment fraud and Authorised Push Payment (APP) fraud, we set ourselves clear outcomes and measure how effective we are in achieving them.
Confidence
Outcome 1: Slow the growth in investment fraud victims and losses
| Metric code | Metric description | Source | Baseline Value | Year 1 values | Year 2 values | Latest status (year 2 value compared to baseline) | ||
|---|---|---|---|---|---|---|---|---|
PFC1-M01
This metric uses the same data as topline metric CCO3-M03[2] and metric IHT3-M01 under the Enabling consumers to help themselves commitment
| Reported investment fraud victims and losses | National Fraud Intelligence Bureau | 26,482 total reported victims (2021) | 25,558 total reported victims (2022) | 26,643 total reported victims (2023) | Improved | ||
£832.5m total reported losses (2021) | £888.8m total reported losses (2022) | £525.7m total reported losses (2023) | ||||||
28% growth in reported victims (Between 2020 and 2021) | 3.5% reduction in reported victims (Between 2021 and 2022) | 4.2% growth in reported victims (Between 2022 and 2023) | ||||||
53% growth in losses (Between 2020 and 2021) | 6.8% growth in losses (Between 2021 and 2022) | 40.8% reduction in reported losses (Between 2022 and 2023) | ||||||
Outcome 2: Slow the growth in Authorised Push Payment (APP) fraud cases and losses
| Metric code | Metric description | Source | Baseline Value(s) | Year 1 values | Year 2 values | Latest status (year 2 value compared to baseline) |
|---|---|---|---|---|---|---|
PFC2-M01
This metric uses the same data as topline metric CCO3-M04[2]
| Reported APP fraud cases and losses. | UK Finance | 154,614 total reported cases (2020) 195,996 total reported cases (2021) | 207,372 total reported cases (2022) | 232,429 total reported cases (2023) | Improved |
£420.7m total reported losses (2020) £583.2m total reported losses (2021) | £485.2m total reported losses (2022) | £459.7m total reported losses (2023) | ||||
27% growth in reported cases Between 2020 and 2021 | 6% growth in cases Between 2021 and 2022 | 12% growth in cases Between 2022 and 2023 | ||||
39% growth in reported losses Between 2020 and 2021 | 17% reduction in losses Between 2021 and 2022 | 5% reduction in losses Between 2022 and 2023 |
Outcome 3: Reduction in financial crime by lowering the incidence of money laundering through the firms we supervise directly and by improving the effectiveness of supervision by professional body supervisors
| Metric code | Metric description | Source | Baseline Value(s) | Year 1 values | Year 2 values | Latest status (year 2 value compared to baseline) |
|---|---|---|---|---|---|---|
PFC3-M01
This metric uses the same data as topline metrics CCO3-M05[3] and WCO2-M03[2]
| Increase in the proportion of applications rejected, withdrawn or refused by the FCA under Money Laundering Regulations (MLRs) or for financial crime reasons | FCA data | 48 Annex I[3] applications (2021/22) | 54 Annex I [6]applications (2022/23) | 84 Annex 1 applications (2023/24) | Improved |
21% were rejected, withdrawn or refused (2021/22) | 24% were rejected, withdrawn or refused (2022/23) | 36% were rejected, withdrawn or refused (2023/24) | ||||
122 cryptoasset registration applications (2021/22) | 88 cryptoasset registration applications (2022/23) | 40 cryptoasset registration applications (2023/24) | Improved | |||
(81%) were rejected, withdrawn or refused (2021/22) | (93%) were rejected, withdrawn or refused (2022/23) | (86%) were rejected, withdrawn or refused (2023/24) | ||||
PFC3-M02
| Increase in the number of customer and payment sanctions alerts generated by firms as reported through the annual financial crime data return | FCA Data | 7,629 alerts (2019/20) 6,755 alerts (2021/22)
| 15,248 (2022/23) | Improved
| |
| PFC3-M03 | Change in Professional Body Supervisor (PBS) effectiveness over time. | FCA Data | OPBAS September 2021 report[4] | OPBAS April 2023 report[5] | OPBAS September 2024 report[6] | Improved
|
| PFC4-M01 | Number of cases opened relating financial crime | FCA data | 548 Financial crime cases opened (Apr 2020 – Mar 2021) 366 financial crime cases opened (April 2021- March 2022) | 613 financial crime cases opened (April 2022- March 2023) | 837 financial crime cases opened (April 2023 – March 2024) | Improved |
| PFC4-M02 | Number of cases opened relating to fraud | FCA data | 1,271 fraud cases opened (2021) | 2,013 fraud cases opened (2022) | 1,039 fraud cases opened (2023) | Declined |
What the latest metric values tell us
For metric PFC1-M01, while there were 4.2% more victims of investment fraud in 2023 compared with 2022, losses reduced by 40.8%. So the rate of growth has slowed significantly compared to the 2021/22 baseline of 28% growth in victims and 53% growth in losses.
Our direct impact on investment fraud trends is difficult to measure, but we believe our interventions have made a significant contribution. We continue to detect unauthorised financial promotions at scale and request that the offending websites are taken down and online platforms are taking more action to block these frauds at source. We have also been working with social media companies to clamp down on illegal financial promotions and issued social media guidance. The Enabling consumers to help themselves section[7] and our 2023/24 Annual report[8] give highlights on our work in this area.
Metric PFC2-M01 shows a 22% increase in APP fraud cases in the first half of 2023 and a 1% reduction in losses in comparison to the first half of 2022. This is a slowdown in the growth of APP fraud compared to our baseline of 27% growth in cases and a 39% growth in losses.
As with investment fraud, it is difficult to be certain as to what is driving this slowdown in APP fraud, in our annual report we highlight some of the key pieces of work we have delivered which we believe contributed to this slowdown. However, it does appear that the continued efforts of the industry and regulators is having an impact. Impersonation scams and investment scams both saw reductions whilst purchase scams continued to rise and made up 67% of all APP cases. This indicates a shift to higher volume, lower value scams. Purchase scams are becoming harder to detect due to the use of AI, however we are hopeful that the Online Fraud Charter[9] will have a measurable impact on the rates of purchase scams.
For metric PFC3-M01, the rate of Rejection, Withdrawal and Refusal (RWR) for Annex I institutions applying to register under the Money Laundering Regulations (MLRs) was 12ppts higher than last year. The increase in the RWR rate for Annex I firms means we have stopped more firms with poor systems and controls from becoming authorised for money laundering purposes. Over time we hope to see the RWR rate fall as firms better understand our expectations and the quality of applications improves.
We are beginning to see this for UK cryptoasset businesses where the RWR rate was 6ppts lower than last year. Following our recent issuing of guidance for cryptoasset registration we expect to see the rate come down further as we receive higher quality applications from firms with robust financial crime systems and controls. So far 43 Cryptoasset firms have achieved registered status.
For metric PFC3-M02, there is combination of reasons for the increase in the number of sanctions matches reported by firms in 2022/23 which includes firms responding to new Sanctions announced by UK following Russian invasion of Ukraine and also the expanded scope of REP-CRIM in 2021 that resulted in a number of firms reporting the figures for the first time starting 2022/23.
PFC3-M03, our OPBAS metric is looking for a positive change in Professional Body Supervisor (PBS) effectiveness over time. Our fifth report shows most PBSs continue to comply with MLRs, but with pockets of ineffectiveness found. We are addressing any issues identified with the relevant PBSs.
For metric PFC4-M01, we have seen a 37% increase in the number of financial crime cases opened in FY 2023/24 compared to 2022/23. This is due to the FCA dealing with issues such as Provision of Banking Services and to better use of data to efficiently identify harm and prioritise cases.
For metric PFC4-M02, our operational data shows we opened 48% fewer fraud cases in 2023 compared to 2022. Most cases involved mortgage fraud, with lenders removing brokers from their panels due to suspected fraudulent practices and Cryptoasset firms who are operating without registration. The reduction in cases is consistent with our expectation of cases involving authorised firms decreasing as our 3-year strategy has an impact. Preventative action such as stopping more firms with poor systems and controls from being authorised, as well as key pieces of multi firm work and work with our partners have all contributed towards raising standards across the industry.