British Banks Warn Of A Spike In Online Scams

Uploaded on 2023-05-16 in NEWS-News Analysis, FREE TO VIEW, BUSINESS-Services-Financial

Britain's largest bank has issued an urgent warning following a spike in a new fraud exploit targeted at those struggling with the cost of living. The scam sees fraudsters contact victims who have entered their details into a seemingly professional website after searching for a loan online.

Every year, thousands of individuals and businesses fall victim to exploits where they are tricked into sending money to an account controlled by a fraudster. There are also a significant number of accidentally misdirected payments that are not recovered.

And now a number of large British banks, including the largest, Lloyds, are saying that there was a large increase in fraud in 2022, mostly in the form of online exploits.

Lloyds, Barclays TSB and Meta Banking Groups Report Scam Increase

Lloyds Banking Group's has said banks are facing an "epidemic of scams" following a 90% surge in so-called "advance fee" frauds in which scammers pose as a legitimate firm and demand money upfront for a loan. Victims have lost an average of £231, the bank said. The director of fraud prevention at Lloyds Banking Group, Liz Ziegler, says banks are dealing with an epidemic of fraud. She noted that taking into account the fact that 70% of fraud cases begin with interaction on the main technological platforms, the owners of these virtual activity spaces should be responsible for countering crime and correcting the situation of innocent victims.

Barclays say that 77% of scams are now happening on social media, online marketplaces and dating apps.

TSB said a large increase in cases of impersonation, investment and purchase fraud were the main drivers of this. It found impersonation scams on WhatsApp had tripled in a year, while fake listings on Facebook Marketplace had doubled.

The bank says there have been "huge fraud spikes" on platforms owned by Meta, such as WhatsApp and Facebook.

NatWest chief executive Alison Rose told a Treasury Select Committee that three million people in the UK were victims of fraud in 2022. "We have seen an 87% increase in fraud," she said, adding that NatWest estimated 60% of frauds originated on social media and technology platforms.

TSB also said 60% of purchase fraud cases of which it is aware - where a scammer sells an item they never intend to send to the buyer, happen on Facebook Marketplace, and two-thirds of impersonation fraud cases it sees are happening on WhatsApp. The bank says it issued 2,650 refunds covering these cases last year.

According to the most recent figures from UK Finance, which represents the banking and finance sector, 56% of the total amount lost to scams was returned to customers in the first half of 2022.

Many banks, including NatWest, Lloyds and Barclays, are signed up to the Contingent Reimbursement Model Code, which aims to reimburse people if they fall victim to an Authorised Push Payment scam "and have acted appropriately".

PSR: UKFinace: BBC: BBC: PaySpace Magazine: Telegraph:

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