Yahoo Finance ‘Explosion’ of scams eroding trust in official bodies, warns Martin Lewis
The “explosion” of scams is eroding trust in official sources of information, consumer champion Martin Lewis has warned.
Speaking to the House of Lords Liaison Committee, Mr Lewis said people who have been “burnt” by scammers will not trust legitimate organisations.
Fraudsters have often used images of Mr Lewis in their advertising to make themselves appear legitimate.
Mr Lewis told the hearing: “We have an explosion of scams in the United Kingdom at the moment, many of them financial.
“Quite a few of them have my face on them, quite a lot don’t as well. Those scams are eroding trust in official sources of information.
“That is making improving financial inclusion far more difficult when people who have already been burnt by scammers using similar language won’t trust official bodies.
“It needs to be put in the Online Harms Bill, there is no plan for that to happen, if that doesn’t happen I am extremely worried how we will ever have financial leadership in this sector again when there are so many scammers purporting to offer it.”
Fraudsters have used the coronavirus crisis to prey on people over the past year, with offers of fake refunds, fake investments and fake offers of masks and hand sanitisers. They will often make their websites appear to belong to legitimate and well-known brands.
The committee is looking at the progress made to tackle financial exclusion.
A report from the Financial Exclusion Committee in 2017 found that more than 1.7 million people in the UK did not have a bank account and 40% of the working-age population had less than £100 in savings.
Since that report was published, the coronavirus crisis has damaged many households’ finances, with evidence suggesting it has exacerbated existing inequalities in society.
Cash use has also declined rapidly during the pandemic – and Mr Lewis raised concerns about the dangers of “enjoying” moving towards a cashless society.
He told the committee: “We should remember that many people are enjoying the move to a cashless society. And that is almost a danger in itself.
“It becomes accepted by the mainstream that we don’t need cash anymore and therefore people don’t consider the need to protect it.”
Mr Lewis, who founded MoneySavingExpert.com and the Money and Mental Health Policy Institute, said the financial education landscape has improved.
Mentioning how he has funded textbooks for schools, Mr Lewis added: “It’s still worth noting, and I say this not to self-aggrandise, but to put it in proportion, I have still put more money personally into financial education than the official Money and Pensions Service has, and I hear it’s talking about reducing budgets for financial education next year.
“I think that is disastrous and needs to be overturned.”
Mr Lewis also highlighted “the up to three million people who have been excluded from financial support in a short-sighted way that will catastrophise their finances and leave them excluded possibly for years in the future”.
He said: “I could not in good conscience come and talk to this committee without at least nodding to the problem of the excluded caused by the pandemic.”
Natalie Ceeney, who chaired the Access to Cash Review, told the committee: “You cannot survive in today’s society without access to basic banking, without access to payments.”
She said regulators need more powers, adding: “They don’t have a statutory duty to make the banks include everybody and they need those powers.”
A Money and Pensions Service spokeswoman said: “We have invested over £2 million in financial education since April 2019 and were pleased to work with Martin Lewis and his team to help fund the successful provision of the textbook.
“As part of our goal set out in the UK Strategy for Financial Wellbeing that, by 2030, two million more people will receive a meaningful financial education, we will continue to work with partners throughout the UK to help children and young people build the money skills they’ll rely on throughout their lives.”
