Yahoo Finance Martin Lewis: ‘There’s an epidemic of scams, but fraudsters are getting off scot-free’
The text message from HMRC about a Covid-19 refund, the email about a mysterious DHL parcel that couldn’t be delivered, the breathless Facebook post from Martin Lewis, urging you to invest in bitcoin – scams are a daily hazard of modern life.
Yet Lewis, the consumer champion who sued Facebook to force them to remove the fake adverts using his name, says that ministers have given fraudsters an “open charter” by failing to tackle online fraud.
Although a bill for online safety will be presented to parliament in the Queen’s speech next week, it will not include any measures to force tech giants, such as Facebook and Google, to vet all adverts they publish on their platforms – a legal requirement for TV companies and publishers.
“I just don’t get why,” Lewis told the Observer. “Why are they not doing it? There is an epidemic of scams in the UK. It’s been exploding for the past three or four years, and it’s been exacerbated due to the pandemic.”
Financial companies and charities almost all support including scam adverts in the online safety bill, Lewis said. “And while it’s being diplomatic on this, let me tell you in no uncertain terms – even the regulator, the Financial Conduct Authority, is shrieking that this should be in the online safety bill.”
In 2018, the founder of the MoneySavingExpert website launched a defamation action against Facebook for publishing more than 1,000 adverts paid for by fraudsters which used Lewis’s face and name to con people into scam investments.
The social media giant settled the action by making a £3m payment to Citizens Advice, but continues to profit from scam ads, MPs claim.
“When I was suing Facebook, I met a senior member of the government. I said ‘can you not regulate?’ And I got this semi-flippant response that, ‘well, it’s really difficult for us to do, which is why we really want you to take the court case’.
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“I think the government and the Westminster classes are absent at the wheel when it comes to scams. And it’s just outrageous that nothing is being done.”
UK Finance, which represents the banking and finance industry, said its members had stopped £1.6bn worth of fraud in 2020, but criminals had still managed to steal £1.26bn. There are at least 3.4 million incidents a year, police say.
The financial ombudsman said it had seen an approximate 50% increase in complaints about scams and fraud, up to about 4,500 from July to September 2020 from about 3,000 in 2019.
Lewis said tech companies claimed that it was too difficult to automatically vet scam adverts. “This is not a tech problem. If you are being paid to publish an advert, you need to make sure your adverts are legitimate. If that means every ad has to be vetted manually by an individual, so be it.”
Although fraud makes up a third of all reported crime, less than 1% of police resources are spent on investigating it, according to evidence given by Graeme Biggar, the director general of the National Economic Crime Centre, to the work and pensions select committee.
Anyone wanting to report a scam is directed to Action Fraud, a national police call centre. It received 822,276 reports of fraud in 2019-20, and 33,415 were sent on to police to investigate. Lewis said: “When I do my day job, I of course encourage people to report to Action Fraud too. But I need to be honest – I think that’s potentially a futile thing for most people to do. Because Action Fraud is outrageously under-resourced.
“I’m not blaming the individuals at Action Fraud. But very, very few cases of fraud are ever investigated. We have an open charter at the moment for scammers and fraudsters that they can pretty much always get away with this scot free. And that simply isn’t acceptable.”
The impact of fraud on victims is appalling, Lewis said. “As well as potentially being life-destroying financially, it has a huge impact on self-esteem and mental health.”
Research by the Money and Mental Health Policy Institute (MMHPI), a charity that Lewis set up, found that people with mental health problems were three times as likely to fall victim to scammers.
“This is not something we can put back in its box and say it was a lockdown problem,” said Helen Undy, MMHPI’s chief executive.
“Scammers are targeting people who are vulnerable because of their mental health, bereavement, long-term health conditions or any number of reasons. So the number of people who are vulnerable is going up, which will mean that number of victims of scams is likely to go up.
Undy said the pandemic had seen an increase in romance scams, where a victim is targeted through online dating, and impersonation scams, where criminals claim to be from a bank or other trusted institution, such as a delivery company.
“The delivery one, that says pay a £2 or £3 charge, was twisted genius,” Lewis said. “So many people are expecting deliveries now. They swear a bit and just pay their delivery, and don’t realise they’ve given away their bank details to a scammer.”
Royal Mail said that if customers needed to pay a surcharge for an underpaid item, they would never request payment by email or text, only by leaving a grey Fee To Pay card through the letterbox.
DPD said customers were increasingly using its mobile phone app to track deliveries, and when it does send text messages, only links from www.dpd.co.uk or www.dpdlocal.co.uk are genuine.
Lewis said that he still receives three or four emails a day from people asking him if the scam ads with his face are genuine.
“A security guard at one of the places I work at approached me. He said he was so excited about putting money into bitcoin, having read my article. And I said, ‘No, no, that’s not me – that’s a scam’. And he started arguing with me that I was wrong, that I had written it. He was unable to accept that it wasn’t true. It took me 15 minutes to convince him. These people have created an altered reality for this man.”
A City of London Police spokesperson said: “We recognise the threat from fraud is increasing and are actively working with police forces and partners across the UK to improve the policing response. This has included investment into new leadership roles and technology, and also increased numbers of officers dedicated to fraud, thanks to the policing uplift programme.”
A spokesperson for Facebook said it had launched a Scam Ad Alert system to allow people to report fake ads. “There’s no place for fraudulent or inauthentic behaviour on Facebook, and we remove ads and content that violate our policies. We continue to invest in people and technology to identify and remove this content, and we urge people to report any suspicious posts to us.”
A government spokesperson said: “The government is working closely with industry, regulators, law enforcement and consumer groups to tackle online fraud.
“This includes our online advertising programme, which will consider further regulation relating to online advertising to reduce online harms, recruiting more police with specialist skills as part of our commitment to recruit 20,000 new officers, and providing scam reporting and takedown services to remove malicious or fraudulent websites.”
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