Aviva is calling for greater protection from online financial fraud after finding that consumers have low trust in the internet as a tool for shopping for financial services.
The insurer is urging the UK government to include financial scams promoted by paid-for adverts in the scope of the Online Safety Bill currently making its way through Parliament.
The latest Aviva Fraud Report, which investigates fraud and financial scams in pensions, savings, investments, and insurance, revealed consumers’ low trust in the internet for discovering and buying financial services.
More than half of surveyed internet users (53%) do not trust that the adverts on search engines are placed by a legitimate financial services company or provider. And more than half (56%) said they doubt that search engines verify the authenticity of the financial product, service, or provider that they allow to be advertised on their platform.
Of those, there is a significant difference in trust by age. Those over 55 were much less likely to trust the results of a search engine than those aged 16 to 24, with only 29% of over 55s compared to 59% of 16 to 24 year olds.
Rob Lee, director of fraud prevention at Aviva, said: “There is a clear mistrust of financial services adverts online. However, there is no legal responsibility for technology firms to verify the legitimacy of the companies which pay them to publish adverts on their platforms. This potentially leaves millions of internet users exposed to unscrupulous adverts.”
“There is no legal responsibility for technology firms to verify the legitimacy of the companies which pay them to publish adverts on their platforms. This potentially leaves millions of internet users exposed to unscrupulous adverts.”
Consumers are clear that more needs to be done to protect them from financial harm online. Almost nine in 10 people surveyed (87%) by Censuswide on behalf of Aviva think the government should legislate to ensure search engines and social media sites do not mislead consumers or promote financial scams.
Of those surveyed, 85% also think search engines should be responsible for advertising content on their platforms so that it is not misleading.
Lee continued: “We believe the Online Safety Bill presents an opportunity to protect financial services consumers at every stage of their online journey. We welcome the recent inclusion of user-generated fraud—such as that promoted on social media sites—within the scope of the regulatory framework. We support the financial services industry in calling for the legislation to include financial scams promoted by paid-for adverts.”
Covid has accelerated the need for action
The Aviva Fraud Report goes on to reveal that lockdowns have transformed spending habits in the UK and accelerated adoption of the internet, with half (50%) of respondents saying they used it more to search for products and services over the last year.
While the types of financial scams are generally the same as those before the pandemic, Covid-19 has been used as the hook to lure victims. Being in lockdown has meant more people using the internet to search for, and buy, financial services and products, according to Aviva.
Lee said: “The challenges posed by lockdown conditions has shifted the mindset of millions, opening the door to more people buying financial services and products online. While this brings opportunities for making it easier to buy products, it does also open the door to fraudsters looking to prey on the vulnerable.”
“[The] government must act quickly to protect more consumers from becoming the victim of online fraud.”
The scale of fraud has accelerated through the coronavirus pandemic, which has resulted in a deluge of opportunities for fraudsters over the last year.
Aviva’s research found that two in five (42%) respondents have been targeted by a Covid scam. This is a 91% increase over the last year in the number of people who reported receiving emails, texts, phone calls and other communications mentioning coronavirus, and which were suspected to be a financial scam.
Lee said: “It’s clear we’re a long way from the government’s commitment to making the UK the safest place in the world to be online. The current online environment combined with challenging economic conditions and increased financial strain on consumers is creating the perfect storm for fraudsters to exploit the most vulnerable. [The] government must act quickly to protect more consumers from becoming the victim of online fraud, by ensuring financial scams are included in the Online Safety Bill.”