MAry Barker’s life as she knew it ended when fraudsters stole £70,000 from her pension pot. When she retired, she thought she had invested the money in a bond from a well-known financial company. However, criminals had cloned her website and documents and tricked her into transferring half of her savings to a private bank account. Her bank refused to reimburse her, saying she had been negligent.
The scam left her in dire financial straits, but much worse was the emotional impact. She told Guardian Money: “I get so depressed sometimes that I don’t know how I can go on. I’m afraid of the future.
Online fraud has nearly doubled during the coronavirus pandemic, with over £750m lost to scammers in the first half of 2021. According to a report by the Police and Fire Services Inspectorate and Her Majesty’s rescue, it can have “permanent and life-changing” effects. consequences” for the persons concerned.
Yet he concludes, “Fraud continues to be treated as a low priority crime, a victimless crime, or a crime that does not cause the harm recognized in other types of crime.”
Business Secretary Kwasi Kwarteng was criticized earlier this month for appearing to ignore the impact of soaring financial fraud. Defending Boris Johnson’s exclusion of scams when he claims lower crime rates, he spoke of ‘the crime that people experience in their daily lives… in terms of burglary, in terms of physical injury, a decreases”.
This provoked an angry reaction from the victims whose lives were destroyed.
Clara Bennett, a 33-year-old NHS worker who was scammed out of her £20,000 wedding savings, says the public perception that victims are gullible, greedy or elderly hides the changing nature of scams . “It allows banks to evade responsibility and only reimburse those they perceive to be not guilty,” she says. “The implication is that some people deserve more justice than others.
“I’m a savvy professional and didn’t think this would happen to me, but scammers posing as my bank’s fraud department used social engineering to throw me into a state of total panic.
“While things seem to be improving when it comes to victim blaming in sexual abuse, it seems the scams remain unchallenged and vindicated by the financial industry.”
Fraud now accounts for 42% of all crimes and only one in 700 fraud cases resulted in a conviction in 2019. The effect on victims may be greater than physical theft, according to consumer group Which?, which estimated the hard year welfare impact is equivalent to £9.3billion. The figure is based on a study of the social impacts of fraud reported as part of an official crime investigation.
Unlike burglary victims, however, many of those who have lost life-changing sums feel guilty. The sophisticated technology and psychological tactics used make it increasingly difficult to distinguish a scam from a legitimate financial service. But the frequent insistence by banks that victims were negligent and the fact that only 4% of complaints to Action Fraud are then passed on to law enforcement authorities suggests that the victims are being blamed.
Bennett’s bank refused to reimburse her, saying it should have been more careful to verify that the callers were genuine. It was an accusation, she said, that had as much effect on her as the financial loss.
“It’s hard to distance myself from what I think others might think of me and how the banks’ responses made me feel,” she says. “My wedding can only happen because of the generosity of my family, but the scam has me wondering if I deserve a wedding party or should I just call it off as some sort of ‘punishment’ for what happened.”
Edward Schwarz, 95, considers himself an experienced investor but was caught out by fraudsters posing as Goldman Sachs. They stole £85,000 from his pension fund in a sophisticated sting.
His bank refused to reimburse him because he did not check the Financial Conduct Authority’s list of cloned companies before transferring the money. “I don’t like leaving home anymore,” he says. “I already have trouble walking after an accident last year and the stress made it worse. I couldn’t get out of bed for a few weeks afterwards.
According to Wayne Stevens, national fraud manager at the charity Victim Support, these stories are typical. “We have supported people who have been forced to sell valuable assets or, in extreme cases, go bankrupt or become homeless,” he says. “Victims may have mental health issues, sometimes being too afraid to leave the house or go online.”
A Treasury committee report this month urged the government to increase police funding to tackle an “epidemic” of fraud and to force banks to reimburse victims. Currently, they can choose to subscribe to a voluntary reimbursement plan. The government has said it plans to invest £400m over the next three years to tackle an ‘epidemic of fraud’.
Barker was finally reimbursed 12 months after the scam when the Financial Ombudsman Service overturned her bank’s denial, but the shock of the ordeal still overwhelms her. “If anyone I know found out what happened, I would die of shame,” she says. “No matter the outcome, I’m scarred for life.”