The F word 🎣

In January 2024, a finance worker in Arup’s Hong Kong office jumped on a video call with the company’s chief financial officer and several colleagues. The CFO needed a confidential transaction done. The worker made 15 transfers to five bank accounts, worth HK$200m, about £20m at the time. But nobody else on the call was real. Hong Kong police later said the faces and voices had been built from publicly available footage, known as deepfakes. So far, so sci-fi. But most fraud is far less sophisticated, and there’s a lot more of it.

The bill

The Crime Survey for England and Wales estimates around 4.5 million incidents of fraud in the year to March 2026. UK Finance says criminals stole almost £1.3bn through payment fraud in 2025. Banks stopped another £1.68bn of unauthorised fraud. The UK puts the wider economic and social cost at £14.4bn or more in 2023-24.

American consumers reported nearly $16bn of fraud losses to the Federal Trade Commission in 2025. The FBI’s numbers are bigger still. Its Internet Crime Complaint Center logged just over a million complaints in 2025, the first time it’s passed a million in its 25-year history, and $20.9bn of losses, up 26% on 2024.

Investment fraud was the biggest single category at almost $8.65bn, most of it crypto-related. People aged 60 and over reported about $7.7bn of losses. Globally, the Global Anti-Scam Alliance reckons scams take more than $1trn a year, based on a survey of around 58,000 people worldwide. Only 4% of victims got their money back.

Chancers

Where there has been money, there has been fraud. In the 4th century BC, a Greek merchant called Hegestratos took out a loan against his ship’s cargo, then tried to sink the empty ship. He was caught in the act, jumped overboard, and drowned. It’s often cited as the first recorded insurance fraud.

In 1822, Gregor MacGregor sold London investors bonds in Poyais, a Central American country that didn’t exist. Settlers sailed out to find jungle, where most of them died. In 1925, Victor Lustig sold the Eiffel Tower to a Parisian scrap dealer. Then he came back and tried to sell it again.

In 1920, Charles Ponzi promised 50% returns in 45 days, from supposedly arbitraging international postal coupons, and paid early investors with money from later ones. Nearly 90 years later, Bernie Madoff did something similar. When he was arrested in December 2008, his clients’ statements showed around $65bn that wasn’t there.

Scams at scale

More than two-thirds of scams targeting British people now originate overseas. Across parts of Southeast Asia, large numbers of people run romance, investment, and crypto scams as shift work. Many of them are victims themselves. INTERPOL says people from 66 countries had been trafficked into scam centres by March 2025. It has since found similar centres in the Middle East, West Africa, and Central America. The UK Government says they’ve reached South America and Europe, including one on the Isle of Man.

In 2025, the UK and US sanctioned Cambodia’s Prince Group network over alleged scam centres using forced labour, freezing London property worth more than £125m. US prosecutors also seized around $15bn of bitcoin linked to its chairman. In March 2026, Britain and INTERPOL launched Operation Shadow Storm to go after the compounds. The UK is putting £250m over three years into its latest fraud strategy, plus a new Online Crime Centre bringing police, intelligence, banks, telecoms, and tech firms under one roof.

Fraud makes up around 40% of crime in England and Wales, but only about 1% of police personnel are dedicated to it. Around 14% of fraud gets reported in the first place, and of the roughly 900,000 frauds reported each year, fewer than 1% end with someone being charged. When the fraudster is in another country, the odds drop further. It’s a high-reward, low-risk crime.

Too good to be true

For banks, the problem is human. Authorised push payment (APP) fraud is when the victim is talked into sending their own money to a criminal. British consumers and businesses lost £576m to APP fraud in 2025. Investment scams took £221.5m. Purchase scams, things like fake listings and tickets, made up 71% of cases. Romance fraud losses rose 23%. And 66% of cases started online, with another 17% starting by phone or text.

Then there are the WhatsApp and Telegram ‘investment clubs’. A ‘friendly professor’ shares stock tips until the group trusts them, then tells everyone to pile into the same thinly traded small cap. It’s an old-fashioned pump-and-dump. In the Global Anti-Scam Alliance’s survey, 67% of people said they could spot a scam. Overconfidence is part of what scammers rely on.

Cooking the books

Enron, Theranos, and FTX all took in professional investors. Wirecard was a member of Germany’s DAX when it admitted in 2020 that €1.9bn of its cash probably didn’t exist. A year earlier, German regulators had banned short selling of its shares and filed a criminal complaint against the Financial Times journalists reporting on it.

Wirecard was caught out by both reporters and short sellers. Firms like Muddy Waters and the now-closed Hindenburg Research publish detailed cases against companies they’re betting against. They’re not neutral, and they’re not always right. But they’re among the few players in the market with an incentive to hunt for fraud.

That incentive can be abused. A short seller with a reputation can move a stock by publishing. This creates a temptation to profit as the shares drop, and get out before anyone checks the facts. In June 2026, a US jury convicted short seller Andrew Left of Citron Research of securities fraud, for recommending trades while quietly doing the opposite. Short sellers can expose fraud, but they aren’t immune to it.

Trust issues

What would it take to get to fraud zero? Every payment checked. Every identity verified again and again. Every call, message, and ad screened. Every transaction traced, no anonymity anywhere. A financial system that watches everything everyone does with their money. The saner alternative is to make fraud costlier and riskier, without making legitimate finance unbearably slow.

Finance has spent centuries devising ways for strangers to lend, invest, and trade on the assumption the other side is who they say they are. Every successful scam teaches someone to trust a little less. And finance doesn’t work very well without trust.