Scammers Con Hyper-Connected Consumers out of £8.5 Billion
Three out of four (76%) UK consumers have been targeted by fraud, according to insights and information company TransUnion, and whilst people are getting better at spotting it, increasingly sophisticated scams mean that the average financial loss has more than doubled in 12 months.
Fraudsters are increasingly impersonating well-known and trusted organisations, with the most common scams currently being fake delivery service texts, supposedly from Royal Mail or other providers requesting payment of false charges (56%), and texts claiming to be from organisations such as HMRC demanding outstanding fees (55%). WiFi scams are also common (36%) with the supposed broadband providers threatening to disconnect if the bogus fine isn’t paid.
At the same time, the means of responding has never been faster, with one in five (20%) consumers now responding to digital messages (emails, texts and social media adverts) within two minutesi – potentially not recognising digital fraud attempts. Gen Z adults are the quickest responders, which might explain why they are the most targetedii, according to TransUnion’s Consumer Pulse tracking the financial impact of the COVID-19 pandemic.
Of those who fell victim to a scam attempt, they collectively lost £8.5 billion – or £1,149 on averageiii – more than doubling from £551 a year agoiv. Whilst the number falling victim to fraud has only marginally increased (from 12% in May 2020 to 14% in May 2021) the sheer scale of attempts and the variety of scams is leaving people vulnerable.
Social media adverts selling hoax products have conned the most people (6%), whilst one in 20 have either paid false charity donations, fallen foul to one of the common text scams, given personal details to what they believed was their bank, paid for a pet on a bogus website, or been tricked by a fake holiday company offering a rebooking or refund.
“Scammers prey on consumers in times of vulnerability – such as the COVID-19 pandemic – and this coupled with an increasing reliance on tech has enabled fraudsters to flourish. Our research has shown that one in seven UK consumers (14%) have fallen victim, perhaps because they’re acting too hastily, often triggered by panic,” explains John Cannon, managing director of fraud and ID at TransUnion in the UK.
On a more positive note, people are becoming more aware of scams and what to look out for. Four in five (79%) say they are more vigilant in general and the same amount carefully study language used in texts or emails to decipher if they are authentic, whilst seven in 10 (70%) are suspicious of all correspondence from any business or brand.
Kelli Fielding, TransUnion’s managing director of consumer interactive in the UK adds: “It’s great to see consumers are getting more scam-savvy but given the volume of fraud attempts happening at the moment, it’s essential to remain vigilant. What we’re seeing is that whilst the rate of consumers falling victim hasn’t changed significantly, the scams have become more sophisticated and the losses much greater and that’s worrying, particularly at a time when many are still dealing with financial uncertainty resulting from the pandemic.
“However, it’s really positive to note that our survey found more than one in 10 consumers (12%) had been protected by their bank or finance provider, which stopped them losing money after falling for a scam. Consumers need to play their part alongside the banks by knowing what to look out for.”
TransUnion’s tips to help reduce the risk of fraud:
- Don’t be rushed. Follow the advice from Action Fraud and ‘Take Five’ to check something out if you’re worried, and use your common sense. Criminals are more likely to try and rush you than those with legitimate requests
- Avoid clicking links or downloading attachments from unexpected emails or messages from a brand or business unless you’re sure you know the origin, as these could release malware onto your device or steal your bank details. It’s okay to ignore emails or messages that are unsolicited
- If you receive a suspicious phone call from a supposed WiFi provider asking for payment and threatening to disconnect you, hang up and ring your broadband provider back on an official helpline number
- Be wary of messages or emails offering a rebate or refund and asking for your bank details. Do not follow the links but if you think it may be genuine call the company directly on their official number and ask for information
- When online, make sure the webpage you are visiting is HTTPS protected or shows a padlock – both of which can be spotted in the domain bar. This indicates that it’s secure
- If you are contacted by someone offering COVID-19 vaccines for money, remember that this vaccination is only available through the NHS, and they will not ask you to pay for it. You should alert the police and Action Fraud in this situation
- When downloading apps make sure you download them through the Apple App Store or Play Store app and take care to ensure you are downloading the official version. Downloading an app from e-mail could be a phishing attempt
- Make sure your security settings are up-to-date on your devices but if you’re working from home, be wary of emails seemingly from your company’s IT department asking you to download an update. You should confirm with them directly using a different telephone number to the one in the email
Regularly check your credit report to help understand and protect your financial standing. This can also help you monitor for fraudulent activity if someone tries to use your identity in a scam. You can check your TransUnion credit report and score for free with Credit Karma, Credit Monitor from MoneySuperMarket, or TotallyMoney.
i On average 28% of UK consumers respond to texts within two minutes, 19% to emails within two minutes, and 14% act on a social media advert within two minutes. The weighted average of these is 20%
iiGen Z adults, born 1995 to 2002, are the most targeted by fraudsters out of any in the UK, at 51%. This is according to TransUnion’s Consumer Pulse research (formerly the Financial Hardship Study), based on research conducted 5 – 9 March with 1,100 UK consumers on behalf of TransUnion
iii 14% of UK consumers have fallen victim to a scam, at an average of £1149. According to latest ONS figures, the current UK adult population is 52,673,433, which means 7,374,281 consumers have collectively accumulated a loss of £8,473,048,869
iv Research carried out by TransUnion in May 2020, spanning 2000 consumers nationwide revealed that 12.43% of UK consumers (18+) reported falling prey to fraud during the COVID-19 pandemic and losing an average of £551.40