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 romance scams have risen to record levels, up by 23% in the last 12 months and with losses reaching £39.2 million.
Romance scams fall under the banner of ‘malicious payee’, where the payer sends funds to a correctly identified payee for what they believe are legitimate purposes but then becomes victim to a scam, such as the payee absconding with the funds. This category of fraud, which also includes purchase scams and investment fraud, saw the highest level of losses in 2025, with a combined 35% increase compared to 2024 – a total of £437 million.
“It is, however, important to note that some of the malicious payee scam types have a long gestation period,” UK Finance wrote in its report.
“Our data captures the loss at the point at which the fraud has been confirmed. As it can take time, sometimes years, before individuals realise they have been victim of an investment or romance scam and then report it, many of the cases logged in 2025 are likely to have been initiated some time prior to that.”
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 the sharp rise in romance scams indicates greater manipulation by scammers.
“Fighting fraud is more than protecting assets,” they added. “It is about protecting people. Every case represents a real person losing money, suffering psychological strain, and losing trust in institutions and digital platforms. As fraud becomes more targeted, action is urgent. Prevention is a societal duty.
“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.”
The total amount of payment fraud reported by UK Finance members in 2025 rose to almost £1.3 billion, up 4% on last year.
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.”
