More than £2.3bn lost to fraud as scams surge during pandemic

A huge shift towards carrying out everyday tasks online for millions of people during the pandemic has led to a devastating surge in scams, according to Which? analysis of Action Fraud figures.

The rearch found that in the year to April 2021, 413,553 instances of fraud were reported to Action Fraud – an increase of a third (33%) on the previous 12 months. More than £2.3 billion was lost by victims as a result.

In previous years scams reported to Action Fraud have increased in more modest increments. The rise between 2019 and 2020 was a much lower eight per cent, suggesting the scams industry has boomed during the Covid pandemic.

These figures also probably vastly underestimate the actual fraud numbers. ONS crime figures estimate that there were more than four million incidents of fraud in 2020 – meaning only around 10 per cent of offences are reported to Action Fraud.

Online shopping scams were easily the most reported type of fraud – having surged dramatically by two-thirds (65%) over the last year as scammers took advantage of more people shopping online.

Which? is calling for the government’s Online Safety Bill to give online platforms a legal responsibility to identify, remove and prevent fake and fraudulent content on their sites – including the adverts often used by fraudsters as the basis for online shopping scams. There were more than 103,000 reports from people who fell victim to online shopping scams – more than the next three scam categories combined.

Which? also looked at the regional breakdown of the Action Fraud data, which shows that consumers are around twice as likely to report being a victim of any type of fraud in the East of England (1 in 187) as in Northern Ireland (1 in 476) or Wales (1 in 380).

With a lot of fraud starting online, theoretically you should be at no greater risk in one region than another, however these fraud figures may be partly explained by variations in internet usage in these regions.

According to the ONS, Wales and Northern Ireland have the greatest proportion of people stating that they have not been on the internet in the last three months. The region in England with the biggest offline population, the North East, also has the fewest reports to Action Fraud in the country (1 in 321). London had the most people online and the second highest incidents of fraud per 10,000 (1 in 193) – with only the East of England having more.

However other factors could play a role too – for instance a lot of promotional activity involving Action Fraud is online which could be having an impact on offline awareness of the organisation.

Young people account for the greatest number of reports of online shopping scams – 56 per cent of reports to Action Fraud came from people aged 20-39. This compares to 34 per cent from victims aged 40-59 and nine per cent from those aged 60-79.

The category that saw the biggest year-on-year increase in reports was phone and text scams at 83 per cent. Fraudsters have taken advantage of people’s changing habits, most recently leading to a surge in texts alleging to be from courier and delivery firms asking recipients for admin fees to retrieve packages.

The second biggest increase was online shopping scams and the third was investment fraud (a 50% increase). Previous Which? research found an explosion of these scams appearing in adverts or results on search engines. Investment fraud also accounted for the most money reported lost overall, at £535 million.

There was also a worrying increase in a particularly cruel scam called ‘recovery fraud,’ where victims are scammed for a second time by criminals pretending to help them recover losses from the original scam. There was a 39 per cent increase from the previous year with victims losing a shocking £14,408 on average. Only mandate fraud (£31,126) and investment fraud (£25,496) resulted in bigger reported average losses per victim.

Which? believes that industries including tech giants, banks, telecoms providers, as well as regulators and the government, must take more responsibility for preventing victims from facing the devastating consequences of scams.

Jenny Ross, Which? Money Editor, said “Fraudsters have added to the suffering that many people have faced during the past year by using the pandemic and the increase in online shopping as a springboard for tricking a growing number of victims.”

“Tech giants, banks, telecoms providers, regulators and the government need to keep up with the evolving tactics of scammers and make sure people cannot be targeted when going about everyday activities like shopping.”

“The government’s Online Safety Bill must give online platforms a legal responsibility to identify, remove and prevent fake and fraudulent content on their sites – including the adverts often used by fraudsters as part of online shopping scams.”

	Fraud Type	Reports	Total Cost	Average cost
1	Online shopping and auctions fraud	103,254	£69,600,000	£674
2	Advance fee fraud	38,844	£52,239,600	£1,345
3	Retail/consumer fraud	29,466	£152,700,000	£5,182
4	Cheque, card, online banking fraud	27,773	£183,900,000	£6,622
5	Investment fraud	20,989	£535,139,700	£25,496
6	Computer fixing fraud	18,811	£22,100,000	£1,175
7	Dating scams	7,754	£73,900,000	£9,531
8	Phone fraud	5,073	£1,500,000.00	£296
9	Mandate fraud	4,681	£145,700,000	£31,126
10	Door-to-door fraud	4,373	£21,000,000	£4,802
11	Fake loan fraud	2,782	£4,100,000	£1,474
12	Ticket fraud	2,104	£2,100,000	£998
13	Fraud recovery	2,096	£30,200,000	£14,408