• ‘Authorised’ fraud losses increased 5% in 2020 to £479 million as scammers ramped up online activity during the pandemic (Source: https://www.ukfinance.org.uk/system/files/Fraud%20The%20Facts%202021-%20FINAL.pdf)
• Unauthorised fraud losses dropped 5% as lockdown restrictions forced criminals to switch tactics - but were still eye wateringly high at £784 million
• Investment scam reports surged by almost a third (32%) during 2020, with losses to these scams increasing 42% to £135.1 million
• Impersonation scam cases almost doubled to nearly 40,000 cases during the year
• Shocking figures show why tackling scam activity, particularly online, needs to be prioritised across Government
Tom Selby, senior analyst at AJ Bell, comments:
“In a year when Coronavirus and the national lockdown led to a surge in vulnerability in the UK, the spike in scams was predictable but nonetheless shocking.
“Investment scam activity in particular has been on the rise, with fraudsters targeting people of all ages – and particularly those over 55 who can access their retirement pots – with offers of outlandish returns.
“In reality, of course, these returns often don’t materialise and, in many cases, the underlying investment simply doesn’t exist.
“If you are tempted by an online offer of this nature, or are contacted out of the blue by someone you don’t know about your pensions and investments, display extreme caution and be sure not to hand over your money without checking you are dealing with a bona fide, regulated organisation.
“Failure to do so could result in your money being stolen and your retirement dreams going up in smoke.”
Minister for Scam Prevention
“Over half the UK adult population – 27.7 million people – show characteristics of vulnerability including poor health, low financial resilience or recent negative life events.
“COVID-19 has also had a severe impact on financial resilience of Brits, with over a quarter of adults (14.2 million) labelled as having ‘low financial resilience’ by the FCA.
“Depressingly, this uncertainty and distress is like catnip to scammers, who use increasingly sophisticated tactics to prey on the vulnerable.
“The political response to this ever-present but evolving threat is often piecemeal, in part because the issues span different areas of Government. The decision to not include financial scams in the Online Safety Bill, for example, has been met by understandable incredulity by campaigners.
“Given the rising incidence of scams, we believe there is a strong case to be made for creating a Minister for Scam Prevention role.
“This would ensure direct ministerial responsibility for addressing the scams epidemic, ensuring interventions are focused in the right areas and help join thinking across different departments.”