Purchase scams are the leading types of scams impacting the largest number of UK consumers according to separate reports from two of the country’s biggest banks.
TSB and NatWest have both cited purchase scams as a rising threat to consumers. TSB found that purchase fraud made up 55% of all cases between January and October this year, whilst NatWest cited the fraud method as making up three of the top-five fastest growing scams.
A notable area of e-commerce targeted by fraudsters is event crickets, both banks observed. This was brought into the spotlight a few months ago when Mancuinian rock band Oasis announced a long-awaited reunion, subsequently scheduling a high-value and high-demand world tour.
Earlier this month, Lloyds, another major retail bank, reported that Oasis fans were being hit by a ‘landslide’ of fraudulent activity. The average victim lost £346, the bank stated, though some extreme cases saw the figure reach £1,000.
This goes far beyond the Gallagher brothers, however. Event ticket scams accounted for 28% of all fraudulent activity so far this year according to NatWest, with fraudsters targeting customers with counterfeit or non-existent tickets to gigs, concerts or sports games.
TSB also urged customers to be wary of fraudulent tickets to concerts and football games in particular – the latter was also highlighted by the duo’s high-street rival Lloyds earlier this year.
In NatWest’s research, event fraud has been overshadowed by parcel delivery scams. . Many consumers will be familiar with receiving a text from an unknown number claiming to be a delivery service like DPD or Royal Mail. This accounts for 40% of all fraudulent activity, the bank found.
Stuart Skinner, a Fraud Expert at NatWest, said: “Fake parcel delivery texts are the fastest-growing scam this year. Think about it: would a real delivery company ask you to follow a link and make a payment?
“Be wary of urgent messages or those asking for payments or to download an app – this will often contain spyware. Or it might be the first step for the criminals to contact you later to continue the con in a different way.”
The reports align with the concerns of HM Treasury, which cited purchase scams as being one of the biggest fraud threats to customers when giving banks new anti-fraud powers last month.
Notably though, neither TSB or NatWest have highlighted romance scams, something which HM Treasury did cite, but the both banks’ reports have reiterated the extent of fraud, which the UK Finance trade body estimates cost British consumers over £570m in H1 2024.
A spotlight on social media again
Unsurprisingly, both banks highlighted social media scams as remaining particularly prevalent. NatWest found that 30% of fraud cases were perpetrated on social media, with a noticeable difference in targeting between age groups.
The bank observed that 25% of 18-34 year olds have encountered fake profiles advertising non-existent goods on social media, as opposed to 7% of those over 65. This may be due to greater use of social media by younger demographics, though 18-24 year olds were the most targeted by scammers overall, with 55% stating they have been approached by a scammer.
Meanwhile, TSB found that Facebook accounted for 67% of all purchase fraud scams by volume and 59% by value, followed by Instagram at 15% by volume and 29% by value. Banks have been shining a spotlight on the use of social media by fraudsters for some time.
This was pushed to the forefront when the Payment Systems Regulator (PSR) introduced new rules around authorised push payment (APP) fraud reimbursement in October, requiring payments firms to reimburse fraud victims to a cap of £85,000.
Payments providers have been arguing that social media and big tech firms should have some responsibility too, with TSB stating earlier this year that over a third of Facebook Marketplace ads are fraudulent.
Nicola Bannister, Director of Customer Support at TSB, said: “At this time of year, we’re all shopping online more than ever – but it’s important to be wary of scams on social media platforms, as crooks are listing items that simply don’t exist.
“We’d advise sticking to reputable websites and only buying an item you’ve found on a social media platform if you can view it in person first.”
The AI fraud threat – real or hype?
Between the two banks, TSB and NatWest have shone a light on a number of different fraud types. Ahead of Black Friday, TSB has warned customers to be wary of not just event and concert tickets, but also sales of cars and motorbikes, clothes and trainers, children’s toys, games consoles, services like home repairs, designer items like bags and shoes, and electronic goods like phones and laptops.
Following event tickets, social media and fake parcel text scams (as discussed above), the remainder of NatWest’s report covered money requests form family or friend scams (29%), costs of living assistance scams (25%), tax rebate scams (24%), refund scams (23%) deep fake celebrity endorsement scams and get rich quick investment scams (both at 22%).
An interesting final takeaway from NatWest’s report focused on the rise of Artificial Intelligence-backed fraud, something which was not noted in TSB’s study. AI voice cloning accounted for 30% of fraud cases last year.
NatWest cities advancements in AI as driving deepface software, automated phishing systems, chatbots and data analytics. This tech allows scammers ‘to create highly personalised and convincing fraudulent schemes, quickly and easily’, the bank states.
However, not everyone is convinced about the extent of AI-backed fraud. A panel at the Future Identity Festival in London yesterday, for example, saw speakers acknowledge the threat posed by AI but state that a ‘science fiction’ style threat is not there yet.
Advancements in technology are continuing, however, and fraudsters will always seek to be at the forefront of this. Banks and regulators too need to be poised to make use of this tech, to fight fire with fire when it comes to AI fraud.
