Fraud operates “on an industrial scale” and is a threat to national security, according to the latest Annual Fraud Report from UK Finance.
The report reveals ‘malicious redirection’ invoice and mandate scams have fallen to their lowest level since 2020, down to £41.3 million. But the total amount of payment fraud reported by UK Finance members in 2025 rose to almost £1.3 billion, up 4% on last year.
Intercepted invoices fall under the banner of malicious redirection fraud, where the payer intends to pay a legitimate payee but, as a result of a scam, instead pays a malicious third party. This type of fraud frequently includes criminals targeting consumers posing as conveyancing solicitors and claiming that the bank account details have changed, with the criminal either intercepting emails or compromising an email account.
The value of losses from invoice and mandate scams fell to the lowest totals ever reported in 2025, down from 4721 cases in 2020 to 2305 cases in 2025.
But writing in the foreword to the report, Jonathan Frost, director, global advisory, BioCatch, and Kamlesh Harry, principal strategic adviser, fraud and financial crime, Nasdaq Verafin, said while traditional fraud methods have declined this does not mean reduced risk.
“Instead, it shows how criminals now exploit human behaviour rather than technical flaws,” they warned.
“Criminals use AI to scale and refine attacks, crafting convincing impersonation scams and deploying deepfakes during account openings.”
They added: “These advances lower barriers, boost success, and allow rapid scaling, especially with agentic AI, which is likely the next force multiplier for global criminals.”
However, the same technology used by criminals to enable fraud is also used to combat it, they said.
“This highlights the dual role of advanced technology in today’s fraud environment.
“Advances in AI and analytics let financial institutions move beyond static controls and implement dynamic, real-time risk assessments to identify and stop social engineering scams…
“Fraud is at a turning point. The industry’s response must now centre on collaboration, innovation, and shared responsibility. This is pivotal for addressing new challenges and making real progress.”
Ruth Ray, managing director of economic crime at UK Finance, said: “Fraud operates on an industrial scale, harming people, businesses and the UK economy, typically funding serious and organised crime in the UK and globally. The financial sector invests huge amounts in protecting customers, but we cannot be the only line of defence.
“Almost £1.3 billion was stolen again last year and it is clear we are not tackling the underlying problem effectively enough. Given most APP fraud still starts via online tech platforms or via telecoms, we urgently need stronger, enforceable responsibilities to be placed on these sectors.
“This is the way to reduce the harm and stop criminals and tech companies profiting from these devastating crimes.”
