Value of fraudulent payments rose by 26% to €126m in 2023

The total value of fraudulent payments rose by 26% in 2023, increasing to €126m from €100m in 2022, new research from the Central Bank of Ireland shows.

Publishing its new Behind the Data (BTD) paper on Irish payment fraud statistics, the research also reveals that the rate of fraud in Ireland as a share of all transactions is low, with value and volume rates at just 0.001%.

The Central Bank said that card payment fraud rate is by far the highest among payment method, with 0.034% of card payments by value being fraudulent.

Online card payments made up 86% of the total value of card fraud in 2023, totalling €37.4m, while the value of money remittance frauds more than tripled from €2.5m in 2022 to €8.2m in 2023.

The new report shows that about 60% of the total value of fraud across 2022-2023 involved cross border payments, amounting to €77m in 2023 and €64m in 2022.

It also noted that around half of fraud in electronic payments by value, amounting to €52m in 2023, were not authenticated via Strong Customer Authentication.

The Central Bank said that fraudulent payments are a growing concern in Europe, especially in the rapidly evolving digital marketplace.

“Combatting fraud in the financial system is a priority for the Central Bank, working closely with law enforcement, other State agencies and peer regulators,” the Central Bank said.

“Where we identify criminal activity taking place in the financial system, the Central Bank works with An Garda Siochána and other agencies who lead criminal investigations and prosecutions,” the regulator added.

Learn more Around 98% of card payment fraud by value was accounted for by “issuance of payment orders by the fraudster” which occurs where fraudsters use stolen card, account or personal information for a payment.

The Central Bank said that “Manipulation of the Payer fraud” occurs where a fraudster gains trust by social engineering or impersonation and convince the payer to make payments to them is evident in credit transfers and e-money payment. In fraudulent credit transfers, payer manipulation fraud rose from 27% in the first half of 2022 to 42% by the end of 2023.

The “Unauthorised payment transactions’ category is more specific to direct debits where a fraudster obtains customer information and sets up mandates without the authorisation of the payer.

More than 99% of all fraudulent direct debits were related to such fraud, with an exception in the second half of 2023 due to a once off incident recorded in this category.

The bank also said that “Modification of Payment order by fraudster” is where a fraudster intercepts and modifies a legitimate payment order, but noted it was very rare, occurring less than 2% of all fraud by value.

About 60% of the value of fraud is made through credit transfer, although these transactions only accounted for 4% of the total number of fraudulent transactions.

The Central Bank said this is due to the fact that credit transfers are often used for large value payments compared with other payment methods in Ireland.

Credit transfer fraud amounted to €70m in 2023, with 24,000 transactions, the regulator found.

Commenting on the research, Michael Kavanagh, CEO of the Compliance Institute, said: “The growing sophistication of fraudsters mean scams have become harder to spot, and therefore easier to fall for.

“Fraudsters are also able to use technology to identify and target people as well as to extract the information they need to steal from someone.”

“It’s incumbent on us all to educate ourselves so that we can protect ourselves as much as possible from the dangers of cybercrime. People must take ownership of what they can do to protect their data.

“We all need to be mindful when sharing our details with online sites and do what we can protect ourselves from spammers, and worse still fraudsters.”