The new analysis comes as the government published the draft Online Safety Bill this week, to include user-generated content on social media and dating apps but not all economic crime.

With the Covid-19 pandemic accelerating consumers’ shift online, fraudsters are adapting their tactics to exploit this societal change. In 20203, the banking and finance industry saw a jump in online-enabled push payment or bank transfer fraud with increases in investment (32 per cent), romance (38 per cent) and purchase scams (7 per cent).

Drilling down on findings from the new UK Finance dip sample4 shows that most investment (96 per cent), romance (96 per cent) and nearly all purchase5 (98 per cent) scams originated online. As it stands, the draft Online Safety Bill will tackle fraudulent investment schemes posted by users on social media - but will not tackle the same scam when digitally advertised or set up through a cloned website.

Impersonation scams, which have also grown significantly in recent months, were the only scams solely initiated via telephone calls and text messaging.

The money lost to APP scams totalled nearly half a billion (£479 million)6 in 2020, with proceeds often funding serious organised criminal activities, including terrorism, drug trafficking and child sexual exploitation: undermining the UK’s standing as a safe place to live and to do business.

Criminals expertly adapt scams to capitalise on the shift in consumer behaviour and vulnerabilities across digital platforms.

While this week’s news that user-generated content will be included in the upcoming Online Safety Bill is a welcome step, to effectively tackle all online scams and stop fraudsters capitalising from loopholes the Bill needs to include all economic crime for a holistic approach.

David Postings, Chief Executive at UK Finance, said:

“As more of us have shifted online because of the pandemic, we've seen a spike in money mule activity and investment and purchase scams because criminals can target people directly in their homes across online platforms. The banking and finance industry is continuing to tackle fraud on all fronts, but there is a limit to what we can do alone.

“We were pleased to hear that the upcoming Online Safety Bill will tackle some aspects of fraud, but it won’t protect people from fraudsters’ online adverts and cloned websites. We encourage government to include all economic crime within the Bill when it is formally introduced. Not doing so leaves a large proportion of the public at high risk of being scammed online, because criminals are experts in adapting their tactics to exploit any loopholes.

“I welcome the recent steps taken by some online platforms to work with us on tackling this issue. This shows commitment and is evidence of the mergence of greater cross-sectoral collaboration to tackle the root causes of economic crime.”

Recent successful cross-sector initiatives include the industry-sponsored Dedicated Card and Payment Crime Unit working with social media platforms to take down 700 accounts linked to fraudulent activity last year, of which over 250 were money mule recruiters.