Social media giants aren’t just helping fraud – they’re cashing in too
Furious accusation from TSB chief...
THE boss of one of Britain’s biggest banks has accused social media giants of aiding fraudsters and profiting from online investment scams during the pandemic. Debbie Crosbie, the chief executive of TSB, told The Mail on Sunday that ‘fraud is the next pandemic’, and condemned social media firms – which include giant platforms such as Facebook, Twitter, LinkedIn, Google Hangouts and Instagram – for their role in allowing victims to be duped.
She said: ‘These companies are not just helping fraudsters, they’re effectively making money from them through advertisements.
‘Fraud is the next pandemic – it’s the fastest-growing crime. So much fraud has begun with social media companies hosting advertisements that are fraudulent. On so many occasions, we have had customers defrauded because they’ve logged on to websites and done their best to check them out, but they are very sophisticated scams.’
The pandemic has pushed consumers into conducting their finances online, leaving them exposed to digital scammers. Savers were cheated out of £135.1 million through investment scams last year, up 42 per cent on the year before, figures from banking trade association UK Finance show.
The number of victims of bogus investBut ment opportunities rose by 32 per cent to 8,958, with the average amount lost per case increasing from £14,000 to £15,000.
As the series of Covid lockdowns forced consumers online, shoppers fell victim to text message scams conducted by con artists purporting to be from delivery firms including Royal Mail and DPD.
The surge in the price of Bitcoin during the pandemic has also sparked scams, involving fake celebrity endorsements of cryptocurrencies.
Individuals suffered losses of up to £200,000 as a result of a scam featuring fake investment advertorials from high-profile businessmen such as Sir James Dyson and Lord Sugar.
Last month, Nikhil Rathi, chief executive of regulator the Financial Conduct Authority, urged the Government to include an amendment to tackle advertising fraud in the Online Safety
Bill, which is working its way through Parliament.
The Government announced measures to tackle some online fraud in the Bill in May, but did not include scams conducted via advertising, cloned websites or email.
Facebook launched a tool in the UK allowing users to report scam adverts in response to a campaign by MoneySavingExpert founder Martin Lewis in 2019. Crosbie has also called for an end to the ‘victim-blaming culture’ around fraud and demanded that big tech firms work with regulators, banks and the Government to tackle the issue.
She said they should have a legal obligation to vet advertisers, take down scam sites and be officially measured on how quickly they do this.
She also called for a code of conduct to protect customers across industries ranging from telecoms to retail.
‘A lot of people have this view that “people are idiots, why did they get involved?” But some of these scams are very sophisticated,’ she said. TSB, which has Britain’s seventh-largest bank branch network serving more than five million customers, launched a fraud refund guarantee in 2019 and publishes the level of refunds to victims.
TSB has a refund rate of more than 98 per cent and wants rivals to publish their equivalent figures.
‘People should be able to choose their bank based on the level of protection and reimbursement,’ Crosbie said.
TSB has signed up to the Good Business Charter, a voluntary accreditation designed to promote responsible business behaviour. The charter, which was founded and backed by Julian Richer of hi-fi retail chain Richer Sounds, demands commitments from firms to a string of goals, including paying fair tax rates, reducing their environmental impact and encouraging diversity in the workforce.
More than 600 organisations have signed up, including insurer Aviva and contractor Capita.
TSB hopes to use commitments to social goals, including fraud protection, as a point of difference as it attempts to win customers from bigger rivals, such as Lloyds and Barclays. Crosbie said: ‘We want to differentiate on the basis that people can trust us. We want relationship banking and we do want to deliver that human touch.’
The bank is in the process of shutting 164 branches this year, angering some customers. Crosbie said every closure was considered ‘carefully’, but that customers were rapidly moving to conducting their banking online.