Social media sites are wild west for shopping fraud, says UK bank | Scams
More than two-thirds of all online shopping scams affecting UK consumers start on Facebook and Instagram, with social media now a “wild west” for fraud, according to one of Britain’s biggest banks.
Research from Lloyds Banking Group estimates that someone in the UK falls victim to a purchase scam originating in one of the two Meta-owned platforms every seven minutes – costing consumers more than £500,000 a week.
Lloyds said tech companies needed to contribute to refunds when their platforms are used “to defraud innocent victims”.
The intervention demonstrates a hardening of the battle lines between Britain’s banks and the tech firms – in particular Meta, which in addition to Facebook and Instagram also owns WhatsApp. Lloyds is the second bank in a month to publicly name Meta, after TSB said there had been a huge jump in the number of scams originating from sites and apps owned by the California-based company.
Just over a fortnight ago the banking industry body UK Finance accused social media companies of “profiting” from scams taking place on their platforms and called on them to reimburse victims.
The growth in online shopping has been accompanied by a surge in criminals tricking people into paying for goods and services that do not exist. Victims are lured in by the promise of cut-price or hard-to-find items, often advertised via social media, and are typically asked to send money directly from their account to another account via bank transfer. Lloyds said that sometimes users “don’t know if the user profile and item are genuine”.
Clothes, trainers, gaming consoles and mobile phones were among the most common goods being falsely advertised, said Lloyds.
The banking group said its research – based on an analysis of reported cases among its 25 million-plus retail customers – found that 68% of all purchase scams now started on Facebook (including its Marketplace site) and Instagram. This accounts for about 40% of the total amount lost to this type of scam, it added.
Combining its data with the latest industry figures, UK consumers are losing more than £27m a year through purchase scams originating from the two platforms, the bank said.
Liz Ziegler, the banking group’s fraud prevention director, said: “Social media has become the wild west of online shopping in recent years … This has left consumers increasingly exposed to ruthless fraudsters, with hundreds of new victims targeted every day and tens of millions of pounds flowing to organised crime gangs each year.”
She added: “It’s high time tech companies stepped up to share responsibility for protecting their own customers. This means stopping scams at source and contributing to refunds when their platforms are used to defraud innocent victims.”
On 5 May, TSB said Meta-owned sites and apps now accounted for 80% of cases within the bank’s three largest fraud categories: impersonation, purchase and investment.
Meta told the Guardian that fraud and scams were “an industry-wide issue, and scammers are using increasingly sophisticated methods to defraud people in a range of ways including email, SMS and offline”.
It added: “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 Financial Conduct Authority-authorised, and we run consumer awareness campaigns on how to spot fraudulent behaviour. People can also report this content in a few simple clicks and we work with the police to support their investigations.”