Annex F: Evidence on vulnerable consumers and telephone scams
F.1 Summary tables
F.1.1 Amounts lost per scam case, report or call
|£2,800/case||2015-2016||11,000||Phone banking fraud reports||Financial Fraud Action UK|
|£693/case (median)||2017||3 months’ case reports||Phone scams where money was lost||Citizens Advice|
|£1,461/case||2016||unknown||Scam call cases advised||Citizens Advice|
|£23,423/case||2012-2014||185||“No hang up” scam cases||Financial Ombudsman Service|
|£233/victim||2015||unknown||Scams among older people||Age Concern survey|
|£600/call||2016-2017||34,504||Computer software phone calls||Action Fraud news release|
|£176/call||2016||5,695||Courier fraud phone scams||Action Fraud news release|
|£58/report||2015||12,000||Computer software phone calls||Action Fraud news release|
|£845/case||2016||unknown||Successful phone scams||trueCall|
|£745/case||2011||unknown||Microsoft support phone scam||Microsoft via Which?|
F.1.2 Use of phones for perpetrating scams
|41% of scams reported to Citizens Advice used unsolicited phone contact||2014-2015|
|67% of pension scams reported to Citizens Advice used unsolicited phone contact||2014-2015|
|68% of pension scams reported to Citizens Advice used unsolicited phone contact||2016|
|50% of Citizens Advice survey respondents had been targeted by phone scams in past 2 years; last scam attempt was by phone for 54% of over-65s (lower %s of younger ages)||2017|
Note: Both phones and other media may be used in grooming a single scam victim, and more than one phone call may take place.
F.1.3 Hit rates of scam attempts
|12.5% of older people receiving a scam communication respond, and 70% of these lose money||2015||Age Concern survey|
|Less than 1% of those who receive certain types of scam communication say they lose money||2011-2012||Crime Survey of England and Wales|
|7% of adults receiving scam calls respond, and 6% of these lose money||2015||Money Advice Service survey|
|Overall success rate of phone scam attempts is 0.56%||2017||trueCall|
|9% of over 65s respond when targeted by a scam, with higher %s among single and older people||2017||AgeUK|
|14% of those targeted by scams are drawn in, and 33% of those lose money||2017||Citizens Advice|
F.2 Groups targeted by scams
Short changed: Protecting people with dementia from financial abuse (Alzheimers Society 2011), based on surveys of people with dementia and their carers, says:
The problems of people with dementia receiving unwelcome or nuisance telephone calls was very commonly reported by carers. More than two-thirds (70%) said that cold callers routinely targeted the person that they care for. Common hazards included inappropriate selling, such as an energy company repeatedly calling to ask the person to change supplier. There were instances of high-pressure tactics, where people were repeatedly sold things like memberships and subscriptions. There were also more complex ‘boiler room scams’.
The report gives the number of people then living with dementia as 750,000; this figure is now forecast to increase to 1m by 2025.
Scams Awareness Month Briefing, Citizens Advice, July 2017
It has been recently reported that the names and addresses of nearly 300,000 people nationally are on lists which are being sold between criminals to use as targets for scams. Research has found that 9 in 10 people on these target lists are unaware that they are being targeted. Often, people who are socially isolated are not able to connect to the support or help to prevent this.
According to Citizens Advice data, when compared to the general population disabled people and those who have a long term health condition ( LTHC) were more likely to be victims of phishing and other banking scams (37% vs 29%) and prizes and lottery scams (41% vs 29%). Though these factors do not necessarily make them socially isolated, they may contribute to it. The Office of National Statistics found that those in poor health are more than 2.5 times more likely to report feeling lonely than those reporting good health.
41.3% of over 65s in Scotland believe they have been targeted by scammers, according to new research for Age Scotland and Age UK. Of those targeted, nearly a tenth (9%) have responded to a scam. Across the UK, over a quarter (27%) of single older people responded to an attempted scam compared to just under a tenth (9%) of their married (or living as married) counterparts.
Of those who had previously been targeted by scammers, 16% of single older people paid them money, compared to just 6% of those who were married. And 22% of those who are single provided personal information compared to just 2% of those who are married.
Compared to 7% of the overall 65+ sample who responded, 9% of those aged 75+ paid money compared to 5% of 65-74 year olds. 6% of those aged 75+ gave personal information compared to 4% of 65-74 year olds.
70% of those older people in Scotland targeted by scammers didn’t report it to an official channel, with 42% only confiding in friends and family, and 25% admitting they didn’t tell anyone at all because they felt too embarrassed. Of those who did officially report the scam however, the vast majority reported having a positive experience.
In addition, the research found that phishing (electronic communication) was the most common scam (experienced by 39% of those targeted), vishing (verbal communication) was close behind (29%), with rogue trader and card fraud following (14%).
Changing the story on scams, Citizens Advice, August 2017
In a nationally representative survey of over 3,000 adults, 72% had been targeted by a scam during the past two years – 55% by email and 50% by phone (the top two channels). All age and income groups were targeted, with lower rates reported by people with incomes below £9,500 or aged over 75 (though this may partly reflect lack of awareness).
F.3 Use of telephone for scamming
Citizens Advice press release 1 July 2015, based on analysis of more than 20,000 scams reported between April 2014 and March 2015
- 41% of scams reported to the Citizens Advice service come from a cold call - making it the most common method of con reported to the national charity - followed by online scams at 18 per cent.
- 46 per cent of scam reports to local Citizens Advice were made by people over 55.
- Over a third (37 per cent) of cold call scams reported to the national charity are for professional and financial services.
Citizens Advice evidence report: consumer experience of pension and pensioner scams before April 2015 : We have observed five key ways that scammers contact consumers: phone calls, texts, letters, the internet and door-to-door tactics. Data from our Consumer Service shows that more than two thirds of reported scams used unsolicited telephone contact. (Citizens Advice Consumer Service Helpline, October 2014 – March 2015)
Scam contact method identified in last 3 months by Citizens Advice staff (pension column) or in past two years by 2017 survey
|Medium||Proportion of scams using the medium|
|Pension scams, 2016||All scams, 2017|
F.4 National statistics and reporting
The CSEW (Crime Survey for England and Wales) 2017 suggests that only 17% of victims of fraud who are resident in households report to the police or Action Fraud. There were 3.4m incidents of fraud (excluding computer-related items, which were a further 1.9m).
The official ONS quarterly fraud statistics do not break out phone fraud as a separate category. In the first quarter of 2017, 156,800 fraud incidents were recorded in England and Wales, 69,000 of them by Action Fraud (the recommended reporting route for telephone scams).
Research on impact of mass marketed scams OFT883 December 2006: Fewer than five per cent of people report scams to the authorities. The research also found that 52 per cent of victims had been targeted again by a scam and that, on average, a victim had a 30 per cent chance of falling for another scam within the following 12 months. This supports anecdotal evidence that a proportion of scam victims are particularly vulnerable and likely to fall for scam after scam. We refer to this type of victim as a chronic scam victim.
Annual Fraud Indicator 2016 (University of Portsmouth) estimates total annual losses due to fraud against individuals at £9.7bn.
Citizens Advice Scams Awareness Month Briefing 2017 offers updated estimates of 3.6m cases of scams and fraud, with an estimated total loss of £10.9bn. This would amount to an average loss of £3,000 per case.
National Audit Office 2016 report Protecting Consumers form Scams, Unfair Trading and Unsafe Goods and 2017 report Online Fraud both contain much relevant material, but nothing specific to phone scams.
F.5 Amounts lost to scam calls
Changing the story on scams, Citizens Advice, August 2017
Median loss to scams, by channel (from consumer service helpline, January to March 2017)
Fraud the Facts 2017 (the Annual Report of Financial Fraud Action UK, now part of UK Finance) records losses due to phone banking fraud of around £30m in each of the last two years, with 11,000 reported cases – an average loss of £2,800 per case.
Protecting consumers from scam calls: toolkit for the Citizens Advice Network (Scams Awareness Month 2017) tells us:
- A quarter of the UK population has received a call requesting personal or financial information (Financial Ombudsman Service)
- 4 in 5 telephone scam complaints to the Ombudsman came from consumers over 55
- £1461 is the average lost to scam calls per affected consumer (Citizens Advice figure, quoted in BIS Consumer Protection Partnership Update 2016)
Calling time on telephone fraud: a review of complaints about “vishing” scams, Financial Ombudsman Service Insight Report, July 2015.
Between mid-2012 and the end of 2014, we resolved 185 complaints involving “no hang-up” scams.
Altogether, the complaints we reviewed represented collective losses of £4.3 million (some of which was later recovered by some consumers). [£4.3m/185 = £23,243 loss per complaint]
|Amount of money lost||Proportion of complainants|
Source: Financial Ombudsman Service.
Base: 173 individual consumer complaints (about “no hang-up” scams).
|Age group||Proportion of complainants|
Source: Financial Ombudsman Service.
Base: 143 vishing complaints (with known complainant age)
…The arrests have come about as a result of work by the City of London Police and forensic and investigative services provided by Microsoft analysing tens of thousands of Action Fraud reports and working with other affected organisations, such as BT and TalkTalk, to attempt to trace the source of the problem. This analysis and enquiries undertaken by the City of London Police have shown that many of the calls originate in India and that the worldwide losses from victims are thought to be in the hundreds of millions of pounds….
…For the financial year 2016/17, there were 34,504 computer software service fraud reports made to Action Fraud, the national fraud and cyber reporting centre, with attributed losses of £20,698,859. This accounts for 12% of all reports to Action Fraud, making it the third most reported fraud type. The average loss suffered by victims is £600 and the average age of victims is 62. Despite these losses the number of victims is thought to be much higher as analysis shows many fail to report.
The FOS vishing report also says:
Action Fraud – the national reporting centre for fraud and internet crime – logged 1,028 instances of consumer phone fraud in 2014.
A growing area of concern has been the increase in fraudsters impersonating banks and police over the telephone – which is commonly referred to as voice phishing, or “vishing”. According to Action Fraud, vishing scams accounted for £23.9 million of losses between December 2013 and December 2014 – more than triple the £7 million recorded in the previous year.
[£23.9m/1,028 = £23,249 loss per victim]
Computer Software Service Fraud involves victims being contacted by telephone and told that there is a problem with their computer and for a fee this can be fixed.
The National Fraud Intelligence Bureau ( NFIB) which assesses Action Fraud reports has said that between June 2014 and November 2014 there were over 12,000 reports that were categorised as a Computer Software Service Fraud. Analysis of those reports suggests that callers purport to be from a variety of organisations such as Microsoft, TalkTalk, BT as well as more generic sounding organisations such as the ‘Windows Technical Department’.
They also said there was a total reported loss of £691,446 with some victims losing up to £6,000.
[average loss per report £58]
National Trading Standards Consumer Harm Report 2016 Case study: Call blocker pilot
The Scams Team worked on a pilot programme focused on blocking scam calls. The installation of a unit designed to block scam calls as part of the pilot saw 34,804 scam calls blocked. It is estimated that the total savings achieved through the pilot amount to over £65,000. The pilot also found that the majority of victims prevented were living alone. [average saving £1.9 per blocked scam call]
Update: the true cost of the “Microsoft support” scam call Which? conversation, 30 June 2017
The scale of this scam call, which has been doing the rounds for nearly [seven] years, is staggering. According to figures from Microsoft, one in five people surveyed in the UK had received one of these scam calls since 2010. Of those who have received a call:
- Over a third said the caller tried to sell them something.
- Over a fifth were asked to permit the caller remote access rights to their computer.
- Over a fifth were asked to download some software.
- And 18% were asked outright for credit card information.
According to Microsoft, half of the victims were aged 55 years or over, and the average amount lost has been a painful £745.
F.6 Consumer behaviour on receiving a scam call
- 63 per cent of Britons have received a suspicious call in the past 12 months
- On average, a scam call lasts 46 seconds before the victim realises that it is not genuine
- Among those that received a scam call since 2010, while the vast majority (93 per cent or 47 million) hang up and end the call after 46 seconds on average, close to one in ten (7 per cent) or 3.5 million adults fell victim.
- Of those, more than one in 20 (6 per cent) went on to transfer money, hand over personal information (6 per cent) and pass on bank details (4 per cent).
[hit rate of 6% of 7% of those approached, or 0.42%]
Only the tip of the iceberg, AgeUK, April 2015
Recent research by AgeUK found that 53 per cent of people aged 65+ believe they’ve been targeted by fraudsters. While only one in 12 responded to the scam, 70 per cent of people of all age groups who did respond said they had personally lost money. This could mean that a staggering half a million older people have fallen victim to losing savings. What is more, the research also suggests that a third of older people who responded may have lost £1,000 or more.
[hit rate 0.7*(1/12) = 6%; average loss per victim £233 and per scam attempt £19]
Less than 1% of adults who received either a lottery communication, guaranteed high investment return communication or romance fraud communication sent or transferred money (data not shown).
Therefore while the 2011/12 survey shows that a relatively large proportion of adults were potentially exposed to becoming a victim of these types of fraud, only a very small percentage actually fell victim. The number of victims is too small to produce any reliable estimates of the scale of victimisation. These may represent underestimates of the true prevalence of victimisation as some victims may have been too embarrassed to disclose this information.
Collaboration between the National Terrorist Financial Intelligence Unit ( NTFIU) and the National Fraud Intelligence Bureau ( NFIB) leads to eight men being jailed for a total of 34 years for defrauding elderly people out of approximately £1 million. The men were brought to justice after an investigation led by the Metropolitan Police’s Counter Terrorism Command and is one of the biggest courier fraud investigations carried out by police in the UK. The gang targeted the elderly and vulnerable in courier fraud-style scams and used 16 telephone lines to make 5,695 calls to 3,774 different numbers across the UK.
[£176 lost per call, 1.5 calls per number]
The research, carried out on behalf of FFA UK by ICM, suggests that 58 per cent of people have received suspect calls, a steep rise from 41 per cent of respondents in a similar study carried out last summer. The increase in scam calls is reflected in new figures, also published today, which show a threefold rise in the amount of money lost to phone scammers. Over the last year, at least £23.9m of losses can be attributed to Vishing – up from £7m in the previous year.
Despite the growing threat to the public, results from the ICM research found that a quarter of people (25 per cent) make no effort to challenge the identity of callers asking for financial information. Meanwhile, 36 per cent of people said they found it difficult to tell the difference between genuine requests for information on the phone and fraudulent ones.
Worryingly, a sizeable minority said they would comply with fraudulent directions from the criminal, believing these to be genuine requests from their bank. A total of 10 per cent of respondents said they would either give cash to a ‘courier’, hand over their card, or move money into another account if requested to do so by a criminal purporting to be from their bank.
F.7 Overall incidence of scam calls
BT April 2017 news release suggests a minimum of 20% of nuisance calls are scams (based on statistics of calls they blocked during a week in March).
2017 Ofcom diarists classify only 4% of nuisance calls as scams – higher than in previous years. In fact a proportion of several other categories were probably scams, but identifying scam calls was not a main aim of this research, and does not appear to have been part of the diarist briefing.
In Cost-Benefit Analysis of Call Blockers, using Ofcom survey data, trueCall’s own database and a range of other information, trueCall estimates that 17% of nuisance calls are scam attempts, with a success rate of 0.48%, an average loss of £845 per successful scam call, and an average annual loss to scam calls of £313 per vulnerable recipient.
F.8 Information from North America
The following reports contain interesting insights and data on scams, gathered in the USA or Canada.
Cracking the Invulnerability Illusion: Stereotypes, Optimism Bias, and the Way Forward for Marketplace Scam Education. Better Business Bureau, Institute for Marketplace Trust, 2016.
2016 BBB Scam Tracker Annual Risk Report: A New Paradigm for Understanding Scam Risk. Better Business Bureau, Institute for Marketplace Trust, 2016.
Consumer Fraud in the United States, 2011: the third FTC survey. FTC, 2013.