Fraud Victims Lose £9.3bn in Well-Being Per Year

Fraud victims suffer well-being costs of £9.3bn per year, according to a new study by Which?

The consumer group made the calculation after conducting an analysis of the psychological harms experienced by people who lose money to scammers. The research conducted with consultancy firm Simetrica found that scam victims have a lower life satisfaction on average than the general population. This includes higher levels of anxiety, lower levels of happiness and to a lesser extent, worse general health.

To make their findings, the researchers analyzed over 17,000 responses to a survey by the Office for National Statistics’ Crime Survey for England and Wales, which asked respondents about the impact on well-being of being scammed.

They applied these results to a social impacts model approved by the UK government earlier this year. This model translates well-being changes into monetary terms.

Which? then calculated that the average drop in well-being for fraud victims equates to £2509 per year. The value is even higher for online fraud, at £3684. These figures are significantly higher than the average financial fraud losses, estimated by Which? to be around £600 per incident.

By applying these calculations to the 3.7 million fraud incidents in 2019/20, the researchers concluded that the overall well-being loss associated with fraud is £9.3bn.

Interestingly, online fraud alone was associated with well-being losses of £7.2bn, highlighting how scammers have increasingly targeted digital consumers in recent years, particularly amid the digital shift since COVID-19.

In July, an analysis by money.co.uk found that Brits lost more than £1bn to fraud and cybercrime in the first six months of 2021.

Which? is now calling on the UK government to include scam adverts in its Online Safety Bill, announced earlier this year.

Rocio Concha, director of policy and advocacy at Which?, outlined: “Our research shows that scam victims suffer a significant drop in well-being when they are targeted by criminals. This brings home the scale of the emotional and psychological harm that victims suffer when they are defrauded.

“The government must not ignore the huge impact an epidemic of fraud is having on our society. Scam adverts must be included in the Online Safety Bill and ministers must set out plans for laws and regulations that will make online platforms use their highly sophisticated technology to effectively tackle harmful content on their sites.”

Commenting on the research, Tim Sadler, co-Founder and CEO for Tessian, said: “Of course, we must recognize the emotional and mental toll online fraud has on people, in addition to the financial damage. Online scams have surged during the pandemic, with cyber-criminals impersonating trusted organizations and institutions over email or text to successfully con people into sharing sensitive data, payment information or login credentials. And this has left people feeling anxious, scared and helpless.”