Investment scam reports surged by almost a third (32%) during 2020, with losses to these scams increasing 42% to £135.1m, according to a report by trade body UK Finance.
So called ‘authorised' fraud losses increased 5% in 2020 to £479m as scammers ramped up online activity during the pandemic, its latest Fraud the Facts report stated.
Unauthorised fraud losses dropped 5% as lockdown restrictions forced criminals to switch tactics, but were still very high at £784m, the latest Fraud the Facts report also revealed.
It cannot be right that online firms are effectively profiting from fraud, while society as a whole pays the price.”
Impersonation scam cases almost doubled to nearly 40,000 cases during the year.
The shocking figures show why tackling scam activity, particularly online, needs to be prioritised across Government, UK Finance argued in the report.
UK Finance is specifically calling for fraud to be included in the scope of the government's Online Safety Bill to better protect consumers from these scams.
This would ensure that online platforms such as social media firms, search engines and dating websites take action to address vulnerabilities in their systems that are being exploited by criminals to commit fraud.
Katy Worobec, managing director of economic crime at UK Finance, said: "The banking industry has worked hard throughout the pandemic to protect customers from fraud and to go after the criminals behind it, with over £1.6 billion of fraud stopped in 2020.
"However, we are seeing a worrying rise in online and technology-enabled scams that evade banks' advanced security systems and use digital platforms to target victims directly, tricking them into giving away their money or information.
"We urge the government to use the upcoming Online Safety Bill to ensure online platforms take action to protect customers by taking down scam adverts on search engines, removing fake profiles on online dating websites and tackling fraudulent content on social media.
"It cannot be right that online firms are effectively profiting from fraud, while society as a whole pays the price."
Another industry expert, Tom Selby, senior analyst at AJ Bell, commented on the report: "In a year when Coronavirus and the national lockdown led to a surge in vulnerability in the UK, the spike in scams was predictable but nonetheless shocking.
"Investment scam activity in particular has been on the rise, with fraudsters targeting people of all ages - and particularly those over 55 who can access their retirement pots - with offers of outlandish returns.
He added that over half the UK adult population - 27.7m people - showed characteristics of vulnerability including poor health, low financial resilience or recent negative life events.
While covid-19 has also had a severe impact on financial resilience of Brits, with over a quarter of adults (14.2m) labelled as having ‘low financial resilience' by the FCA.
"Given the rising incidence of scams, we believe there is a strong case to be made for creating a Minister for Scam Prevention role.
"This would ensure direct ministerial responsibility for addressing the scams epidemic, ensuring interventions are focused in the right areas and help join thinking across different departments", Selby said.