The Mail today launches a campaign to fight the growing scourge of online financial fraud in Britain.
Criminals are using sophisticated internet investment scams to swindle life-changing sums from victims – leaving many pensioners destitute later in life.
The crooks often use fraudulent adverts and websites to tout bogus schemes ranging from bonds and pensions to bitcoin.
And in a sinister development, many now use images of celebrities or household names such as Lloyds Bank, HSBC, Aviva, M&G and Hargreaves Lansdown without permission to lure victims into a false sense of security.
More than £78m was lost to these ‘brand cloning’ scams last year – an average of £45,000 per person – and the figure is rapidly rising, according to Action Fraud, the UK’s national reporting centre for fraud and cyber crime.
Overall it is thought that £1.7billion was lost to fraud last year, with 85 per cent of cases taking place online.
Victims are often elderly. Many are approaching, or in, retirement and the devastating losses can mean they are forced to work longer or potentially sell their home.
And the proceeds are being used by criminal gangs to finance further crimes including drug trafficking, child sexual exploitation and even terrorism.
Despite this, sham ads and websites have been waved through with minimal scrutiny by telecoms companies and internet giants such as Google and Facebook, which make a profit from their placement.
So today, we are calling on the Government to take action against these despicable scams by including internet fraud in the forthcoming Online Safety Bill, also known as the Online Harms Bill. We want web giants to be given a legal responsibility for the ads and websites they carry on their platforms. This would include verifying whether these ads and websites are legitimate and not linked to fraud.
Our Stamp Out Investment Fraud campaign is backed by Britain’s biggest banks, asset managers and insurers, as well as elderly charity Age UK and consumer champion Which?.
City institutions who support it include TheCityUK, the Investment Association, UK Finance, City of London Corporation, City of London Police, Innovate Finance, the Personal Investment Management & Financial Advice Association (Pimfa) and the Association of British Insurers. The Financial Conduct Authority – the City watchdog – says it has also ‘very clearly’ recommended that online fraud be included in the government bill.
Backing the campaign last night, Chris Cummings, chief executive of the Investment Association, said: ‘Online financial scams have increased hugely since the start of the pandemic, with devastating consequences for victim’s lives.
‘We’re urging the Government to include these scams in the Online Safety Bill, and regulate online platforms to ensure the adverts they carry are legitimate and people are protected.’
Liz Field, chief executive of Pimfa, said they welcome the campaign. She said: ‘Online fraud is ruining lives and it is growing at an alarming rate. We urge the Government to take notice.’
And Anabel Hoult, chief executive of Which?, said: ‘We are delighted that the Daily Mail is taking a stand on behalf of the millions of people at risk of being caught out by fraudsters.
‘Online platforms like Google and Facebook are not doing enough to tackle an epidemic of scams, leaving users dangerously exposed to devastating financial and emotional harm.’
Last night Facebook said it was putting ‘significant resources’ into tackling scams, while Google said it had joined forces with banks in Stop Scams UK to take down bogus content quickly.
The gaping hole in new internet law
The Online Safety Bill is set to feature in the Queen’s Speech next week.
At the moment, it aims to tackle internet content that harms users, particularly children, and deal with issues of child safety, bullying and extremist content.
But it excludes the crucial issue of online financial fraud – an omission that campaigners and the Mail believe is a serious mistake. Today we call for:
- The Online Safety Bill to include financial scams.
- Internet platforms to be made legally responsible for checking that adverts and websites are not fraudulent.
- Platforms to have a legal duty to take down scam adverts and websites immediately.
Bank of England governor Andrew Bailey has called for financial scams to be covered by the bill. And the City watchdog, the Financial Conduct Authority, has made a ‘clear recommendation’ to ministers for financial fraud to be included in the bill.
Tricked by fake Aviva site
Pensioners Donald and Val Woodhams lost £11,000 last year in an online scam.
Mrs Woodhams, 73, found an internet ad that had Aviva’s branding and transferred £2,000 and £9,000 over two days from her Nationwide account.
Paperwork sent through showed her new account had been credited with £171 interest. Mr Woodhams, 75, decided to invest his £50,000 in the same bond. But his first £10,000 transfer on January 6 was blocked after Nationwide flagged it as suspicious. But the building society refused to refund his wife her £11,000 losses because it said she had ignored the scam warnings on her screen.
VICTIMS LOSING A STAGGERING £45,000 EACH
Victims of ‘brand cloning’ investment scams are losing a staggering £45,000 each.
The total amount lost to this type of fraud in 2020 alone reached £78m, according to Action Fraud.
The group said that amounted to an average of £45,242 per victim.
The issue may be even more widespread because many victims do not immediately realise they have been duped or feel too ashamed to come forward. They are often elderly people who are in retirement or approaching it, meaning that such huge losses can leave them destitute in their twilight years. City institutions are warning that the rise of brand cloning scams is one of the most concerning trends in fraud. By impersonating legitimate businesses online, using their brand and logos in digital ads and fake websites, criminals lull their victims into a false sense of security. The sophisticated scams sometimes involve entire call centres full of staff with false email addresses and documentation.
Victims are promised decent returns and then persuaded to hand over cash by bank transfer – with many not realising for months that they have been duped.
Con artists have masqueraded as household names including Aviva, HSBC and Goldman Sachs. Banks have been under increasing pressure to block dodgy transactions and warn customers about such schemes, but now the finance industry is calling for web giants such as Google and Facebook to be held to account as well.
Anne Boden, boss of UK digital bank Starling, said: ‘We need the internet firms, social media companies and telecoms providers to take responsibility.’
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