There’s no such thing as a ‘victimless crime’ when it comes to fraud. As losses soar, we’re calling for paid-advertising to be brought into the Online Safety Bill.
How many of us have received a suspicious parcel delivery text or seen an online advert touting a well-known celebrity’s endorsement of cryptocurrency in recent months?
I certainly have, and it feels like anyone who has a mobile phone or regularly uses the internet has had the same experience, as fraudsters have exploited the pandemic to target victims sitting at home waiting for deliveries and scrolling through their social media news feeds.
Chances are you may have had a near-miss yourself, or have a friend or family member who did fall victim to a scam. It can happen so easily. That simple act of clicking a link or filling out an online form can hand scammers the keys to a treasure trove of personal information – enough to directly raid the victim’s account or target them with convincing calls claiming to be from their bank’s fraud department.
This is why we’ve seen scam losses soar since the start of the pandemic – with more than £750 million stolen from bank customers in the first half of this year alone according to UK Finance.
The impact on mental wellbeing
When scam victims pluck up the courage to tell family and friends about their experience, the initial reaction is often sympathetic, but the focus quickly turns to the financial side: how much money did you lose? Have you cancelled your card? These are all important considerations – but they miss a wider consideration: the impact on a victim’s mental wellbeing.
We hear from so many people who have lost money – ranging from tens of pounds to, in some cases, hundreds of thousands, potentially seeing their life savings wiped out in an instant. But what of the impact on their emotional wellbeing, their loss of self-esteem and their loss of trust in other people?
Even people who get their money back after a scam can experience these feelings. The resultant trauma, as Victims’ Commissioner Dame Vera Baird QC pointed out recently, can have a similar impact to serious assault.
To get a sense of that trauma, we have, for the first time, calculated the monetary value of this wellbeing hit that scam victims can suffer. We analysed more than 17,000 responses to the Office for National Statistics’ Crime Survey for England and Wales to determine this, with the results applied to an approach to assessing social impacts approved by the Treasury earlier this year.
We found that the knock-on effect to scam victims’ wellbeing was the equivalent of £2,509 for offline fraud, and £3,684 for online fraud. Both figures are substantially more than the average financial sum lost to fraud, which is estimated to be around £600.
When we applied these calculations to the 3.7 million fraud incidents that occured between 2019 and 2020, they suggest a total loss of wellbeing associated with fraud victimisation of £9.3 billion a year. For online fraud specifically, the figure is £7.2 billion.
These numbers highlight the often underestimated impact of fraud on victims’ wellbeing and demonstrate the huge scale of this problem. Policymakers must take account of the impact this is having on our society, not to mention our economy.
‘Priority illegal content’
The research reinforces the importance of including online scams (including fraud facilitated through paid-for advertising) in the government’s Online Safety Bill, which is currently in its draft form. Yesterday, in front of the Joint Committee on the Draft Online Safety Bill I made these arguments to MPs.
I hope the powerful evidence I gave just now, at parliament, alongside the brilliantly briefed Rocio Concha Galguera of @Which? is enough to persuade the government to PUT SCAM ADS in the #onlinesafetybill!— Martin Lewis (@MartinSLewis) October 18, 2021
The government must designate fraud and fraud-related offences as priority illegal content within the Bill, which means that online platforms would be under a legal obligation to give the strongest possible protections.
Paid-for advertising, from which so many online scams stem, should be brought into the Bill’s remit to allow consumers to go online with confidence – without this we won’t even touch the sides of the scale of scams being perpetrated online.
Ultimately there is no such thing as a ‘victimless crime’ when it comes to fraud. Being scammed can result in trauma, a sense of shame and a knock to the victim’s confidence that lasts for months or even years. The consequences go far beyond the financial.
Even if the amount of money lost to a scam might not be life-changing, the impact on a victim’s wellbeing might well be.