UK Finance has called for new legislation to make online platforms responsible for taking down fraudulent content and protecting consumers from scams.
The push for legislation comes as the organisation publishes research that found criminals have been using the covid-19 pandemic to target victims via online platforms and technology-enabled scams.
UK Finance said it wants fraud included in the scope of the government’s Online Safety Bill, because it would ensure that online platforms such as social media firms, search engines and dating websites “take action to address vulnerabilities in their systems” which are being exploited by criminals to commit fraud.
The trade union, which represents over 250 financial service institutions, said that impersonation scam cases, in which criminals impersonate trusted organisations to trick victims into handing over their money, almost doubled to 39,364 cases in 2020, the largest increase of all scam types.
The research revealed a 32 per cent increase in investment scam in 2020, which have often been promoted through adverts on search engines offering higher than average returns, and a 38 per cent increase in cases of romance scams, driven by the rise in online dating during the pandemic.
During the pandemic, criminals have sent fraudulent emails claiming to offer government support to those impacted by the pandemic and scam text messages requesting payments to book a Covid-19 vaccine. UK Finance said that scammers have also impersonated delivery companies to exploit the rise in online shopping.
The union said that last year, Authorised Push Payment (APP) fraud losses grew by 5 per cent, amounting to £479 million.
Banks and other finance providers were able to return £206.9 million of the losses from APP fraud to victims, over three quarters more than the sum returned in 2019.
The organisation’s study also found that almost £7 in every £10 of attempted unauthorised fraud was blocked by the banking industry last year.
Unauthorised fraud fell by five per cent to £783.8 million in 2020, with the banking industry stopping £1.6 billion of losses.
“The banking industry has worked hard throughout the pandemic to protect customers from fraud and to go after the criminals behind it, with over £1.6 billion of fraud stopped in 2020,” said Katy Worobec, managing director of economic crime, UK Finance. “However, we are seeing a worrying rise in online and technology-enabled scams that evade banks’ advanced security systems and use digital platforms to target victims directly, tricking them into giving away their money or information."
She added: “We urge the government to use the upcoming Online Safety Bill to ensure online platforms take action to protect customers by taking down scam adverts on search engines, removing fake profiles on online dating websites and tackling fraudulent content on social media.”
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