Social media users are seriously underestimating their chances of falling victim to online fraud and suffering devastating emotional and financial consequences because tech giants are not doing enough to warn and protect them, Which? is warning.
The consumer champion’s latest research using an online community of Facebook users showed that a majority were lulled into a false sense of security by the platform’s social nature. They mistakenly assumed they could spot fraud and that the company’s systems would protect them effectively.
However Which? found a third of participants did not know that fake products might be advertised on the site – putting them at risk of falling victim to purchase scams. A quarter did not spot an investment scam advert with a fake endorsement from a celebrity.
If this was to be replicated across Facebook’s user base of 44 million Britons, huge numbers of users could potentially be at risk from fraudsters who lure in victims with fake accounts, posts and paid-for ads on the site.
The financial consequences for those tricked by these fraudsters as well as those who post scam adverts on websites and search engines like Google can be devastating.
Which? has heard from many victims of these types of scams – including a man who lost almost £100,000 after clicking on an online investment advert featuring fake endorsements from MoneySavingExpert’s Martin Lewis and Deborah Meaden from BBC show Dragons’ Den.
The emotional consequences are equally serious. Scam victims told Which? that it had shaken their confidence in themselves and their ability to trust other people. A woman who lost £30,000 to an investment scam which featured prominently on Google said she still feels shame and despair 15 months on from her ordeal, adding: “It breaks you as a person.”
Which? is calling on the Department for Digital, Culture, Media and Sport (DCMS) to act now and include online scams in the upcoming Online Harms Bill so that consumers are protected from this huge and growing problem.
Which? carried out in-depth research with an online community of Facebook users over 10 days, and also conducted a nationally representative online survey including 1,700 Facebook users, as part of its new policy report ‘Connecting the world to fraudsters? Protecting social media users from scams’.
The research found that older social media users are often more concerned about scams, and perceived as being at greater risk by their fellow users. But the findings suggested that younger people may actually be more susceptible to scams as they are more persuadable and more likely to take risks, such as taking part in online shopping and quizzes used by some fraudsters.
Knowledge among users of what Facebook does to protect people from becoming a victim of a scam was low, although users assumed Facebook did have systems and processes in place. However, when details of Facebook’s actual systems and processes were explained, users were sceptical about their effectiveness and questioned whether they are sufficient.
Just three in 10 (30%) respondents to Which?’s online survey of Facebook users said they were aware of the scam ad reporting tool introduced by the site in 2019. Only a third of these, 10 per cent overall, said they had used the tool themselves.
Which?’s research was conducted with a focus on Facebook due to its size and influence in the social media landscape. However, the consumer champion believes that the findings and implications of this research can be reasonably extended to apply to other similar social networking sites and online platforms.
The amount of money lost to fraud every year is huge. In the year to June 2020, Action Fraud received 822,276 fraud reports, and the value of losses from reported incidents was £2.3 billion. Action Fraud estimates that 85 per cent of all fraud in the year to June 2020 was carried out digitally.
Which? spoke to one man, retired and in his seventies, who lost almost £100,000 to a Bitcoin scam, which started in February 2019, by a company called Fibonetix. He had seen an online advert which had fake endorsements from celebrities including MoneySavingExpert’s Martin Lewis and businesswoman Deborah Meaden.
The man, who preferred to remain anonymous, told Which?: “Being scammed in this way was utterly devastating. I think about it virtually every day and it’s really affected my confidence, my ability to make decisions and has ultimately changed the person that I am. Fortunately I have been able to get through it with the support of my family.”
Another victim, a sound engineer in her forties, was searching for investment advice on Google and ended up filling in contact details with a firm that seemed legitimate. Receiving a phone call a few days later she then ended up falling victim to an incredibly sophisticated scam, which took place over several weeks, and lost £30,000. Her case is currently being investigated by the Financial Ombudsman Service.
She says the experience has impacted her mental and physical health and that “it’s been really traumatic. At the time it felt like no one cared or wanted to discuss my case with me. It breaks you as a human being and leaves you scared of the outside world.”
Despite it happening 15 months ago she says: “It’s still hard to trust yourself and others. Often people think these things only happen to older people and it takes a long time to not feel like an idiot. There’s a lot of shame and despair which hasn’t gone away and I’m still awaiting closure to this day.”
Which? is calling for online platforms, including social media sites, to be given greater responsibility to prevent scam content appearing on their platforms.
The government has a perfect opportunity to deliver this in the upcoming online harms bill, and if not ministers must set out their proposals for further legislative action to effectively protect consumers from online scams.
Rocio Concha, Director of Policy and Advocacy at Which?, said: “The financial and emotional toll of scams can be devastating and it is clear that social media firms such as Facebook are failing to step up and properly protect users from fraudsters on their sites.
“The time for serious action on online scams is now. If the government doesn’t grasp the opportunity to deliver this in the upcoming online harms bill, it must urgently come forward with new proposals to stem the growing tide of sophisticated scams by criminals online.”
- The Which? policy report ‘Connecting the world to fraudsters? Protecting social media users from scams’ can be found here: https://www.which.co.uk/connectingfraudsters
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