Expert Witness Journal Issue 68 August 2026 - Flipbook - Page 108
What do these 昀椀gures suggest?
a broader allocation-of-risk question that matters
directly to the 昀椀nancial sector.
First, fraud appears to be becoming more diversi昀椀ed.
It is not con昀椀ned to one product, one sector or one
customer journey. Payment card misuse, account
fraud, insurance-related deception and social
media-enabled scams all sit within the same wider
pattern: criminals are exploiting fragmented digital
systems and the large volume of information that
individuals and organisations now share online.
What this means in practice
For consumers, the headlines are a reminder
that fraud prevention is no longer just about
being cautious with bank details. It also involves
scrutinising online adverts, checking whether
sellers and service providers are genuine, and
acting quickly when something feels wrong. Speed
matters, both in reporting a suspected scam and in
preserving records of messages, adverts, payments
and account activity.
Secondly, the reported growth in insurance fraud
is striking because it suggests fraudsters are
adapting quickly to sectors where onboarding,
claims handling and veri昀椀cation processes may have
become increasingly digital.
For businesses, these reports underline the need to
look beyond conventional cyber security. Fraud risk
increasingly sits at the intersection of compliance,
customer experience, advertising controls, payment
processes and complaints handling.
Thirdly, the continued prevalence of plastic card
fraud is a reminder that older methods do not
disappear simply because new ones emerge. Fraud is
cumulative. New channels are added, but established
vulnerabilities remain.
Organisations should be asking whether their
veri昀椀cation procedures are robust, whether
customer warnings are clear, whether suspicious
patterns are being escalated e昀昀ectively, and whether
their contractual arrangements allocate risk
appropriately across suppliers and platforms.
From the perspective of banks and 昀椀nancial
institutions, that means anti-fraud strategy can
no longer focus only on the payment moment. It
increasingly requires investment across customer
authentication,
account
monitoring,
mule
detection, complaints handling, data sharing and
reimbursement processes, all against a backdrop of
rising regulatory scrutiny and growing expectations
that 昀椀rms will intervene before losses crystallise.
For banks and 昀椀nancial institutions, the direction of
travel is especially clear.
Public scrutiny is increasing, regulators expect 昀椀rms
to strengthen anti-fraud controls and customer
outcomes, and reimbursement models mean that
昀椀nancial institutions may carry substantial cost
even where the scam originated on a third-party
platform. In practice, that raises di昀케cult questions
about where 昀椀rms should focus investment, how
far they can or should rely on customer warnings,
how they identify vulnerable customers, and how
they collaborate with receiving 昀椀rms, platforms and
law enforcement. Even where liability is contested,
the reputational, operational and complaints
burden can be signi昀椀cant. For many institutions,
the commercial imperative is not only to respond to
fraud claims e昀케ciently, but to improve controls at
source, disrupt mule activity, enhance intelligence
sharing and evidence clearly that governance and
systems are keeping pace with the way fraud now
occurs.
Why the platform point matters
The Lloyds 昀椀gures are particularly signi昀椀cant
because they focus attention on where fraud may
begin, not just where the 昀椀nancial loss is eventually
felt. If a large proportion of fraud cases are linked
to adverts or interactions on social media platforms,
that has implications for the wider debate about
responsibility, prevention and redress.
For banks and payment 昀椀rms, this is a particularly
acute issue.
UK reimbursement rules for Authorised Push
Payment (“APP”) fraud which is where a victim is
tricked into making bank transfers to an account
that poses as a legitimate payee, have increased the
incentives on 昀椀nancial institutions to prevent losses
and compensate victims, even where the initial
deception may have originated elsewhere in the
digital ecosystem.
Looking ahead
These headlines do not tell the whole story, and
they should always be read with care in light of the
methodology behind the underlying reports. But
they do point in the same general direction.
That helps explain why debate is intensifying around
whether platforms, payment providers and other
intermediaries should shoulder a greater share of
responsibility where scams are enabled upstream.
Claimant 昀椀rms reportedly pursuing cases on behalf
of those who say they lost money after responding
to fraudulent adverts on Facebook or Instagram
are therefore testing not just platform liability, but
EXPERT WITNESS JOURNAL
Fraud is becoming more embedded in everyday
digital activity, more expensive for victims and more
di昀케cult to treat as a problem for one sector alone.
For banks and 昀椀nancial institutions, the challenge
is particularly acute because legal responsibility,
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AUGUST 2026
