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Gloucestershire Business News

Fraud: Lloyds takes a swipe at Meta

Lloyds Banking Group, which has headquarters in Barnwood, has hit out at Facebook and Instagram with a stern warning that the sites have become "the wild west" for internet shopping. Meta must do more, says the banking giant.

An estimated £27m is being lost by UK consumers each year and Lloyds believes media platforms are fuelling the surge, with a specific call on Meta to tighten up its tech.

Liz Ziegler, Lloyds' Fraud Prevention Director, said: "Social media has become the Wild West of online shopping in recent years, with very few checks in place to verify who is selling what. This has left consumers increasingly exposed to ruthless fraudsters, with hundreds of new victims targeted every day and tens of millions of pounds flowing to organised crime gangs each year."

She added: "Banks have been at the forefront of tackling the epidemic of scams, but they cannot fight it alone. It's high time tech companies stepped up to share responsibility for protecting their own customers. This means stopping scams at source and contributing to refunds when their platforms are used to defraud innocent victims."

Lloyds Banking Group, whose brands include Bank of Scotland and Halifax, has shared new analysis of reported cases among their more than 25 million retail customers. It revealed that:

● two-thirds (68%) of all purchase scams now start on just two Meta-owned social media platforms - Facebook (including Facebook Marketplace) and Instagram. This accounts for around 40% the total amount lost to this type of scam.

● someone in the UK falls victim to a shopping scam across these two platforms every seven minutes, costing consumers more than £27m a year.

● clothes, trainers, gaming consoles and mobile phones are among the most common goods being falsely advertised.

● across the banking industry the average amount being lost by the victims of purchase scams is around £570.

Victims, says Lloyds, are lured in by the promise of cut-price or hard-to-find items, often advertised via social media, and are asked to send money directly from their account to another account via bank transfer (also known as a Faster Payment), which provides very little consumer protection when something goes wrong.

The bank added: "the reality is that almost 80% of scams start in the tech sector. By the time a victim reaches the point of making a payment through their bank account, it is very difficult to detect amongst the billions of genuine transactions which take place each year. Fraud is linked to only 0.01% of all Faster Payments (equivalent to one in every 10,000 transactions) made across the UK.

"Take purchase scams as an example - as these make up the majority of all reported scams - where a customer is typically transferring just a few hundred pounds from within their own secure online banking account. There is often nothing unusual happening at the point the payment is being made to indicate to the bank that its customer is being scammed."

The Daily Mail reports that Lloyd's intervention today puts the banking group's boss Charlie Nunn "at loggerheads with Facebook tycoon Mark Zuckerberg".

Purchase fraud grew by 40 per cent since the start of the pandemic to more than 117,000 cases in 2022, according to the UK Finance trade body, the trend coinciding with a boom in online shopping, more time spent on social media and shortages of goods due to supply chain issues.

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