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Online scam numbers: Effective government action needed

21 September 2020

Quilter is calling for more action by government to prevent scams as its most recent Freedom of Information (FoI) request has revealed that less than 7% of pension fraud reports are being passed to the police, despite millions of pounds of retirement savings lost to scammers. 

The FoI request by Quilter found that nearly 400 pension fraud reports were submitted to Action Fraud in 2019, but only 26 cases were forwarded to the police to investigate.

Quilter has called on the government to do more to tackle the threat of scams by including scam adverts, fake websites and other financial harms within the scope of the Online Harms Bill, which was due to be introduced to Parliament next year.

In doing so, search engines and social media platforms will have a legally enforceable duty to remove suspected scammers and scam adverts immediately on notification and improve their due diligence process to make it harder for scammers to market investment products using paid adverts.

Jon Greer, head of retirement policy, Quilter, said: “We are entering a period of considerable economic uncertainty, and one in which generating a decent return on your investments will be extremely challenging. This is the ideal environment for scammers to thrive and it is no surprise to see huge amounts of money still being lost each year at the hands of criminals.

“The fact that it is so hard to investigate and prosecute pension scams is effectively handing pension scammers a get out of jail free card. If you are mugged, it’s highly likely that the police will investigate, but lose your life savings to a pension scammer and your odds don’t look good.

“The legal deterrent appears to be ineffective, so more must be done to prevent scammers from operating, and to do this we must cut the line of communication between the scammers and their victims: search engines and social media.

“The government have taken action on unsolicited pension calls with the ban on cold calling, but scammers are sidestepping the legislation and moving online. Movement on the regulation of search engines and social media platforms has been painfully slow and the regulation has failed to keep up with the evolution of scammers.”

Since 2017, a total of £30.8 million has been lost to scams, but Quilter says this could be “just the tip of the iceberg” given the number of victims unaware they have fallen prey to a fraud.

Pension scams are extremely complex, require considerable police resources to investigate and in many cases, are only discovered years after the event. As a result, Action Fraud and the investigatory agencies are forced to prioritise the cases they believe can lead to a successful criminal outcome, according to Quilter.

Impersonation scams on the rise

Meanwhile, separate figures from UK Finance have revealed that impersonation scams soared 84% year-on-year to almost 15,000 cases in the first half of 2020, as criminals exploit the Covid-19 crisis to target their victims.

A total of £58 million was lost to impersonation scams between January and June, up 3% on the previous year.

Impersonation scams occur when the victim is convinced to make a payment to a criminal claiming to be from a trusted organisation. Among the 15,000 scams reported by UK Finance, over 8,220 cases involved criminals impersonating the police or a bank – a year-on-year rise of 94%.

A further 6,730 cases involved fraudsters imitating other organisations such as a utility company, communications service provider or government department, an increase of 74%.

UK Finance said the Covid-19 pandemic had presented criminals with more opportunities to scam victims, with ploys including posing as airline or travel agencies offering refunds for holidays and flights, or IT departments and software providers seeking access to people’s computers.

Katy Worobec, managing director of economic crime, UK Finance, commented: “Criminal gangs are ruthlessly exploiting this pandemic to commit fraud, so it’s vital we all work together to beat them.

“We are urging the public to remain vigilant against these vile scams and remember that criminals are experts at impersonating people, organisations and the police.

“Always take a moment to stop and think if you receive a request to make a payment from someone claiming to be from an organisation you trust. Instead, contact the company or organisation directly using a known email or phone number, like the one on their official website.”

Professional Paraplanner