Bank customers lost a record £1.3 billion to online scams last year, according to lobby group UK Finance. In 2021, investment fraud accounted for nearly one third of losses, with the promise of high returns enticing potential victims.
UK Finance’s Annual Fraud Report notes that scammers are aware that pension freedoms have given over-55s access to huge sums. Additionally, you have a recipe for disaster when around 13m people are unable or unwilling to pay for financial advice.
The average loss per victim for investment fraud last year was more than £14,000. These scams typically originate from cold calls, but also:
- Fake online ads promising high returns on fictitious investments
- Social media bombardment
- Letters through the post
- Cloned websites
Opportunities for online bank fraud
“Opportunities” tend to be time restricted and victims are pressured to act swiftly or lose out.
Sometimes victims are persuaded to put more money into a scam after they’ve seen an initial “return” on their investment.
Perhaps you are savvy. You may scoff at the prospect of becoming a victim. But modern scammers are very sophisticated. They research their targets thoroughly using information gathered from:
- Data breaches
- Social media (we already know how little protection our data has there)
Sharing this information as a cautionary tale is great. But what can be done to resolve the problem?
Lead police commissioner for economic and cyber-crime Mark Shelford claims the most cost-effective way of fighting fraud is through education. Warnings in banking apps will simply not suffice. Clearly, there is a need for public awareness campaign.
Social media, online shopping outlets and search engines are the most used corners of the internet. They have a moral obligation to protect their users and create a barrier to fraud. They shouldn’t be enabling fraud and making users vulnerable, but sadly, that’s exactly what they’re doing.