Online fraud up by a third in the UK during the pandemic

The prevalence of online fraud has spiked during the pandemic as people have relied more on the internet for everyday tasks, with £2.3bn lost by consumers last year.

Cases of fraud reported to the UK police unit Action Fraud rose by a third in 2020, reaching more than 410,000, according to analysis by consumer rights group Which?

Scams related to shopping, investments and delivery-related frauds, and carried out over phone and by text, had already been on the rise — but at a slower pace than in 2020. The consumer group warned that last year’s acceleration indicated that “the scams industry has boomed during the Covid pandemic”.

New laws to tackle soaring levels of financial fraud have been proposed in the UK government’s draft online safety bill, threatening social media sites with fines unless they do more to protect people from losing large sums of money.

But Jenny Ross, money editor at Which?, cautioned that regulators and internet companies needed to “keep up with the evolving tactics of scammers”.

Fraudsters, she said, were using the increase in online shopping during the pandemic as a “springboard” for tricking a growing number of people, adding that the online safety bill should make it the platforms’ “responsibility to identify, remove and prevent” fake adverts posted by fraudsters.

The full scale of the problem might also be bigger than reports to Action Fraud indicate. ONS crime statistics include more than 4m incidents of fraud in 2020, indicating that only a fraction of victims report fraud to police authorities.

Online shopping scams were, as in recent years, the most reported type of fraud. Complaints to Action Fraud surged by 65 per cent in the year ending April, with more than 103,000 people falling victim according to Which? Young people were disproportionately affected, with 56 per cent of online shopping scam complaints made by people aged 20 to 39.

The category of fraud that grew the fastest during the pandemic was scams over phone and text. Messages such as those from fraudulent couriers that ask for administrative fees to deliver non-existent parcels surged by 83 per cent in the past year.

But consumers lost most money through investment scams, roughly £535m in the past year. Which? researchers had found “an explosion of these scams appearing in adverts or results on search engines”.

Internet companies such as social media platform Facebook and payment company PayPal argue they make significant investments into preventing fraudsters using their platforms, but they do profit even from fraudulent advertisements or transactions.

Facebook said its team of 35,000 staff who work on safety and security disable billions of fake accounts every year, as the platform tries to “detect and reject scams”.

“We don’t want fraudulent activity on our platform,” it said.

PayPal said “sometimes things can go wrong” and that its payment protection cover gives people 180 days to report issues, such as not receiving goods and services they paid for.

An indication of how cruel online scams can be, said Which?, was the growth of so-called recovery fraud, where victims are scammed for a second time as fraudsters pretend to help them recover losses from the original scam. Last year, victims lost an average of £14,408 to these kinds of crimes.