Fraud losses in the UK rose to £1.28 billion in 2025, according to FICO, which linked the increase to a shift towards scams that manipulate victims rather than break into accounts.

Figures cited by the analytics group showed that more than four million fraud cases were reported across the UK during the year. The pattern of losses suggests criminals are moving away from attacks that rely on technical access and towards fraud that persuades people to make payments themselves.

James Roche, Fraud Consultant at FICO, said the strongest growth came in authorised payment fraud, where victims approve transactions after being deceived. Losses in that category rose 19% to £576.4 million.

Within that total, so-called malicious payee fraud was a main driver. In these cases, victims believe they are paying for a legitimate product, service or investment.

Investment scams rose 40% to £221.5 million. Purchase scams increased 20% to £118.1 million, while romance fraud climbed 23% to £39.2 million and advance fee scams jumped 65% to £58.4 million.

By contrast, losses from malicious redirection scams fell to their lowest level since 2020. In these cases, criminals impersonate police officers, bank staff, chief executives or procurement staff to divert payments.

“Every scam that requires technical access to an account is declining,” Roche said.

“Every scam that requires psychological access to a person is accelerating. This is because fraud prevention systems were designed to detect unauthorised access. Now they need to identify people who are being tricked in real time.”

Card fraud

Unauthorised card fraud followed a different pattern. The number of card fraud cases rose 11%, but losses were broadly flat, suggesting criminals are targeting larger numbers of victims for smaller amounts.

“Criminals are targeting far more people for smaller sums in this space, perhaps because the perpetrators are less sophisticated fraudsters using compromised cards or stolen cards,” Roche said.

Remote purchase fraud, also known as card-not-present fraud, now accounts for more cases than all other unauthorised fraud categories combined, FICO said. It pointed to social engineering tactics used to obtain one-time passcodes for digital wallet registration as a key factor.

The figures reflect a broader change in how fraud is organised, according to Roche. He said criminals are moving away from one-off or physical attacks and towards broader networks built around exploiting victims directly.

“Criminals are shifting from system compromises to human exploitation and from opportunistic or physical fraud to organised fraud ecosystems,” Roche said.

That shift is also changing what banks and payment providers need from fraud controls. FICO said firms must assess customer intent before a payment is authorised, monitor behaviour in real time and share information more effectively across teams and systems.

Roche said the industry was moving away from isolated tools aimed at single risks and towards shared platforms that combine signals across different products and channels. He added that banks needed to use artificial intelligence more effectively than fraudsters while keeping decisions explainable.

FICO also referred to work involving its Scam Signal service and Jersey Telecom, which uses telecommunications data to flag when a consumer may be under pressure during a live conversation, such as an impersonation scam. Roche said that can give a bank a chance to contact a customer before money is sent.

“We are seeing a real impact from the use of our innovative Scam Signal solution, in collaboration with Jersey Telecom,” Roche said.

“This solution uses telecommunications data to identify when a consumer may be being tricked in a conversation such as an impersonation scam, enabling the bank to reach out to the consumer and thwart the attempt.”

Changing tactics

Roche said the next stage of the response would depend on a fuller view of customer behaviour across channels and products, as well as preparation for fraud threats linked to agent-led interactions and newer prevention technology.

“Fraud teams need a deep cross-channel, cross-product, customer-centric view of everything their customers do, and who they are,” Roche said.

“This is how banks win against the fraudsters. The banks’ advantage is that they can create context and deep-level relationships to protect customers when they need them the most. Fraudsters can’t achieve that; they deploy the same strategies to many, hoping to find the most susceptible people.”

KAREN JOY BACUDO

Finance Editor

The British Business Bank has invested more than £600 million directly in more than 50 UK science and technology scale-ups, marking a sharp increase in the state-backed lender’s late-stage investing activity.

Direct equity investments have more than doubled from £290 million in October 2025 to more than £600 million, with more capital deployed in the past nine months than in the previous four years combined. The direct equity portfolio has grown from 31 companies in March 2025 to more than 50.

The expansion is part of a broader effort to address gaps in Britain’s late-stage funding market, where high-growth businesses have often looked overseas for larger rounds of capital. The bank is on track to invest more than £400 million a year through direct equity under a plan to commit £2 billion over five years.

Since making its first direct equity investment in Quantexa in 2020, the institution has built a portfolio spanning life sciences, deeptech, advanced manufacturing, clean energy, defence, artificial intelligence and fintech. Those are sectors policymakers and investors see as strategically important to the UK economy.

Latest figures also show a marked rise in deal activity. The bank completed 18 new investments and 18 follow-on investments in the 2025-26 financial year, compared with 12 investments the year before. Total investment rose 2.5 times year on year, from £75 million to £188 million.

The increase comes as ministers and public finance bodies seek to keep more scaling companies in Britain, while pension funds, insurers and other domestic institutions face pressure to commit more money to growth businesses. A longstanding concern in UK venture finance has been the relative scarcity of large domestic funding rounds for companies moving beyond the early stage.

The British Business Bank, the UK government’s economic development bank, has become a more active participant in later-stage financing through its direct equity programme. The strategy envisages deploying about £2 billion a year into the UK venture capital market overall, with about 20%, or roughly £400 million, earmarked for direct equity deals.

Under the model, the bank expects to make between 14 and 18 new investments a year. Initial cheque sizes typically range from £10 million to £40 million, with cumulative investments over time reaching up to £75 million.

Capital gap

The bank has framed the expansion as a response to structural weaknesses in the UK funding landscape. Britain has produced a steady flow of venture-backed companies in areas such as AI, life sciences and financial technology, but many founders and investors argue that the market still lacks enough later-stage capital to support growth at home.

The issue has fueled a broader debate about how to capture more of the economic value generated by British research and start-ups. Public policy has increasingly focused on whether promising domestic firms can remain headquartered in the UK and expand rather than shift abroad as they mature.

“Supporting UK scale-ups is a national economic imperative. The UK excels at creating businesses, but our domestic capital base has yet to match our scientific excellence. Our activity should be interpreted as a clear signal to UK institutional capital that we want them to join us in backing UK scale-ups. We now have fuel in the tank and intend to put UK innovation in fifth gear,” said Leandros Kalisperas, Chief Investment Officer at the British Business Bank.

The bank’s direct equity team has also linked the larger annual target to the number of venture-backed businesses that are now reaching the stage where they need larger rounds. That shift has increased pressure on both public and private investors to provide later-stage support in a market where overseas capital has often played an outsized role.

“We are accelerating our ambitions to match the calibre of UK innovation. By investing £400 million per year into the most exciting venture-backed UK scale-ups across life sciences, deep tech, AI and fintech, we aim to act as an ecosystem multiplier and ensure the most innovative UK businesses have the capital and support to scale rapidly,” said Charlotte Lawrence, Managing Director and Head of Direct Equity at the British Business Bank.

The government has presented the increase in direct investment as part of its industrial policy agenda, linking scale-up finance to economic growth and business retention in the UK.

“We are ramping up the pace and scale of investment, backing the UK’s highest-growth scale-ups at a level not seen before through our modern industrial strategy. By more than doubling investment in just nine months, we’re giving firms the firepower they need to stay and scale here in the UK and drive the economy,” Peter Kyle, Business Secretary, said.

Speaking on BBC Radio 4 ahead of a House of Commons Public Accounts Committee hearing, the Money Saving Expert founder said customers should know exactly what they’ll pay when they sign a contract.

“I’d love to see all price hikes banned during fixed contracts,” Lewis said. “But I accept that companies argue their costs can change. A fair compromise is simple: don’t allow prices to rise by more than inflation during the contract.”

Lewis believes such a rule would leave “99 per cent of consumers better off” while still allowing firms some flexibility if costs increase.

The consumer champion was particularly critical of broadband contracts, where two-year deals have become the norm.

“If you’re signing up for 24 months, you now have to factor in two separate price rises just to work out what the contract will really cost,” he said.

He also warned that the cheapest deals are rarely available directly from providers.

“The biggest savings usually come through comparison sites because they include marketing incentives like gift cards or cashback that aren’t available if you go direct.”

Lewis said one of the biggest flaws in the current system is that providers can still increase prices after customers have signed a contract.

Although firms must tell customers in advance, he argued the rules don’t work in practice.

“Most people don’t react when they receive a notification email. They react when they see the higher bill land. By then, the 30-day window to leave penalty-free has often expired.”

He wants customers to be given two opportunities to cancel without paying exit fees: once after notification of a price rise, and again after the increased bill arrives.

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Lewis also criticised Ofcom’s current pricing rules, saying they had failed to deliver for consumers.

“Seventy-five per cent of people are paying more under the new system than they did under the old one,” he said, citing MoneySavingExpert analysis of 45,000 broadband and mobile tariffs.

“Almost everyone is seeing above-inflation increases during their contract. That’s simply not fair.”

An Ofcom spokesperson said the regulator shared Lewis’s aim of ensuring consumers receive telecoms services “at a fair price”.

The regulator said its rules were designed to give customers “complete clarity upfront” about the prices they would pay throughout their contract and confirmed it will carry out an in-depth review of the pricing transparency rules, with findings due to be published next year.