Look Out! Banks Warn Of Dramatic Increase In Online Scams

These days, almost all banking is done online and, why not? It’s quicker, easier, and faster to access. But online banking does, unfortunately, come with a big red warning sign attached. 

The BBC has reported that multiple banks have warned of the significantly large increase in fraud which took place last year, much of this originating through online banking, and implore action as this worrying figure continues into 2023.

Everything from impersonation to authorised push payments to invest and purchase fraud has seen a dramatic rise in the past year. So, if you haven’t already, now might be a good time to take note and reassess your attitudes towards the safety of your online bank and approach towards social media.

The Scamming Epidemic

There are several reasons why a person may be financially taken advantage of and scammed, and, unfortunately, there are several ways to make this happen online.

Recently, NatWest chief executive Alison Rose told a Treasury Select Committee that three million people in the UK were victims of fraud in 2022 alone. 

“We have seen an 87% increase in fraud,” she said – a concerning figure that cannot help but demonstrate the presence of a scamming epidemic. 

Regarding this dramatic increase in scams, Liz Ziegler – Lloyds Banking Group’s fraud prevention director – has confirmed that banks really are in the midst of facing an “epidemic of scams”.

Ms Ziegler has explained that this sharp increase in bank scams has primarily originated from various forms of social media. 

The director of the fraud prevention group has implored social media platforms to take action so that we may quell this current epidemic: “With more than 70% of fraud starting with contact through the main tech platforms, these companies must be held responsible for stopping scams at source and putting things right for innocent victims.” she finished. 

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Pointing Fingers: Banks Blaming Social Media

For all the benefits social media offers, the risks it houses regarding bank scams are becoming increasingly undeniable. 

Ms Ziegler warned that 70% of fraud starts with contact through central tech platforms, and this is supported by multiple other bank statistics. 

In relation to the 87% increase in fraud NatWest witnessed last year, Ms Rose continued to confirm that an estimated 60% of these frauds originated on social media and technology platforms.

Barclays has also said that 77% of scams are currently happening on social media as well as through dating apps and online marketplaces. 

Furthermore, TSB confirmed that there have been “huge fraud spikes” on platforms owned by Meta, such as WhatsApp and Facebook.

TSB said 60% of purchase fraud cases (where a scammer sells an item they never intend to send) happen on Facebook Marketplace, and two-thirds of impersonation fraud cases are happening on WhatsApp.

Paul David, TSB’s director of fraud prevention, echoed Ms Ziegler’s warning by stating that it is the responsibility of social media companies to “urgently clean up their platforms” to protect consumers.

“It’s high time that social media and telephone companies took financial liability for the rising levels of fraud taking place on their platforms,” he said.

Fighting The Fraud 

In response to widescale scamming, banks have had to issue a huge amount of refunds to upset and angry consumers. 

TSB has had to issue 2,650 refunds to cover cases in the last year in accordance with the bank’s promise that it will reimburse people in 97% of all fraud cases it sees. The bank is campaigning for others to follow suit.

“Scammers are using increasingly sophisticated methods to defraud people in a range of ways, including email, SMS and offline,” a spokesperson for TSB stated. 

“We don’t want anyone to fall victim to these criminals, which is why our platforms have systems to block scams, financial services advertisers now have to be FCA (Financial Conduct Authority) authorised and we run consumer awareness campaigns on how to spot fraudulent behaviour.”

TSB’s efforts to issue widespread refunds and impose strict regulations to prevent scamming are helping to set an example for what others can do to prevent scamming, though many other banks have also taken a step to introduce extra anti-scamming measures. 

Several 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 (APP) scam (where a person is tricked into transferring money into an account operated by a fraudster) and have acted appropriately.

But whilst banks issuing refunds and imposing anti-scamming regulations is important, it does not solve the root of the problem or prevent the crime from happening to anybody else. In order to truly cure this epidemic, it is essential that the relevant tech and social media platforms step up to take action on their own.

While some tech platforms have responded to the scamming epidemic, with a spokesperson for Meta agreeing that the company believes fraud is “an industry-wide issue” that must be internally addressed, not enough action has been taken. 

Government action in this matter has also been severely lacking.

Rocio Concha – Director of Policy and Advocacy at Which? – agrees that statistics put forward by banks “expose the worrying scale” of fraud on social media and criticises the UK government for not doing enough to address the issue.

“The Online Safety Bill has been going through Parliament for more than a year and progress has been much too slow, with people still being scammed every day,” 

“The government must take a vital step in the fight against fraud by ensuring the bill includes the strongest possible protections for consumers and is passed into law without further delays,” she said.

Until the Online Saftey Bill goes through and social media platforms have taken a firmer grip with online scammers, is our online banking in the UK really safe? 

Indeed, it’s difficult to deny that even the most scam-savvy of us shouldn’t be concerned by these bank statistics and the subsequent lack of action. So, in the wake of the scamming epidemic of last year and its continuation into 2023, it is of the current up-most importance to stay alert, know who you’re dealing with and, of course, never open suspicious-looking messages