Banks Warn Of Sharp Rise In Online Fraud

Banks have warned of a spike in fraud over the past year, with a large proportion of scams originating online.

TSB said it had found large increases in impersonation, investment and purchase fraud using social media platforms.

Impersonation scams on WhatsApp tripled in a single year, with false product scams doubling on Facebook Marketplace.

The bank said Instagram has become a hotbed for investment scams, and now makes up 59 percent of all investment fraud cases.

Image credit: Trace Le Blanc/Pexels

Refunds

It said it has refunded 97 percent of these cases, but warned that some other major banks have refunded at a far lower level.

Santander said 70 percent of authorised push payment (APP) fraud originated on social media and Big Tech platforms.

Nationwide director of economic crime Jim Winters said social media lacked the safeguards found elsewhere.

“Controls are yet to catch up with other industries, allowing criminals to all but freely target victims on platforms such as Marketplace and Whatsapp in particular,” he said.

He called for a collective approach to “stop fraud at the outset” rather than after it has taken place.

Collective approach

TSB pointed out that Facebook Marketplace does not have its own payment platform, meaning users often sent payments via bank transfer, which lacks the fraud protections of payment cards or PayPal.

Meta said fraud was an “industry-wide issue”, with scammers using email, SMS and offline techniques as well as social media.

“We don’t want anyone to fall victim to these criminals which is why our platforms have systems to block scams, financial services advertisers now have to be FCA authorised and we run consumer awareness campaigns on how to spot fraudulent behaviour,” the company said.

It added that users can report fraudulent content and that Meta works with police to support investigations.

Matthew Broersma

Matt Broersma is a long standing tech freelance, who has worked for Ziff-Davis, ZDnet and other leading publications

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