Bank customers lost a record £1.3 billion to online bank fraud 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)
Cautionary tale
Sharing this information as a cautionary tale is excellent. However, how can we address the problem effectively?
Mark Shelford, the lead police commissioner for economic and cyber-crime, asserts that education is the most cost-effective means to combat fraud. Merely relying on warnings within banking apps is inadequate. Thus, a public awareness campaign is imperative.
Social media, online shopping outlets, and search engines dominate the internet. They have a moral obligation to protect users and fortify defenses against fraud. Instead of enabling fraud and exposing users to vulnerabilities, they must prioritize user safety. Regrettably, that’s currently not the case.
Scam Alert
This message serves as a warning against potential online scams, including website scams and investment scams. Please exercise caution and conduct thorough research before engaging in any online transactions or investments. Protect your personal and financial information from fraudulent activities, and consult with trusted sources for advice.
Insolvency and Law Peter Murray is an award-winning consultancy firm specialising in Insolvency, debt purchasing and business rescue.