Almost half of people who believed to have been targeted by a financial scam in lockdown did not report it, with many lacking the knowledge of who to report to, Aviva has found.
The pension provider’s fraud report, published today (July 22), found 22 per cent of the 2,009 people surveyed had been targeted by suspicious communications, such as emails, texts and phone calls which mentioned coronavirus, equating to 11.7m people in the UK.
But half of these did not report the scam to an authority or their provider as they were unsure of who should deal with the reports, while a third (36 per cent) did not think it would be investigated.
Worryingly, a quarter also said they could not be bothered to report the scam and 21 per cent said they did not realise they should have reported it.
Only 9 per cent failed to alert authorities as they thought the scam was legitimate at the time.
Reporting scams is important to allow the regulators and police act early on and prevent them from becoming a wider issue, potentially leading to high compensation costs.
Peter Hazlewood, group financial crime risk director at Aviva, said: “As lockdown measures are eased, it’s inevitable the fraudsters’ tactics will again develop beyond coronavirus. It’s more important than ever that people remain vigilant - particularly with respect to protecting their personal data - reporting any suspicious communication to Action Fraud, their financial services provider or the Police.
“The best chance we have of catching these criminals is through better information sharing. The industry needs to work together with the authorities to support each other in protecting the public and our customers.”
One in 12 (8 per cent) people have been the victim of a financial scam which related to coronavirus and of those, 78 per cent told Aviva the fraudsters pretended to be from a company they already deal with.
Suspicious communications which relate to health insurance increased by 15 per cent since the beginning of the pandemic in March, Aviva found.
There were also increases in suspicious communications linked to life insurance (10 per cent) car insurance (7 per cent), pensions (3 per cent) and annuities (2 per cent).
Aviva found some of the most common scams during this time involved scammers offering savers a ‘unique’ investment opportunity or the chance to unlock cash in a pension, which guaranteed high returns.
People were easily lured by this prospect as Covid-19 had caused stock markets to crash, ultimately affecting savers’ pensions and investments.
Another fraud doing the rounds involved a cold call telling consumers to check their health and life insurance policy.
The fraudsters claimed they were from a reputable insurance company or that they had been asked to do this by the regulators – all in a bid to gain trust.
According to Aviva, while they may offer lower premiums, they fail to mention that the lower premium also means reduced cover, often leaving the consumer with a worthless policy.
Mr Hazlewood said: “While the types of financial scams are generally the same as those before the pandemic, fraudsters are exploiting the pandemic to take advantage of people when they are at their most vulnerable. They are using coronavirus as a pretext to lure potential victims.
“The scams range from attempts to sell people unsuitable insurance to, at worst, stealing their entire retirement savings. The impact on victims is not just financial either, it has a detrimental effect on people’s mental wellbeing too.”
Last week, the Investment Association warned fraudsters have been convincing savers to purchase investment products that do not exist and to give away their personal details as part of a “sophisticated” impersonation scam.
The IA said a number of firms across the industry have been affected and approximately 300 incidences of this fraud have been reported to date, with an estimated total loss to savers of £4m.
amy.austin@ft.com
What do you think about the issues raised by this story? Email us on fa.letters@ft.com to let us know.
