More than a fifth of British adults have been tricked out of money by financial fraudsters, losing on average £1,002, according to new research by Kalgera.
This rises to £1,523 for people who have a carer while those aged 25-34 lose the most at £1,355. Of those who have lost money, 3% have lost £10,000 or more.
Despite this week marking one year since the Financial Conduct Authority (FCA) issued guidance for banks and building societies to protect vulnerable customers, who are often more susceptible to scammers, financial vulnerability has risen. The FCA guidance has been designed to help financial institutions better understand the needs of vulnerable customers to enable them to make any necessary changes to ensure they are treated fairly.
But the Cost of Living crisis is only going to increase the levels of vulnerability, according to Kalgera, an AI powered platform designed to help banks and financial institutions identify and protect vulnerable customers from financial harm. The research it commissioned found that a staggering two in five (21%) respondents self-identify as financially vulnerable.
The pandemic, coupled with a hike in the cost of living, has taken its toll on the physical, mental and financial health of the nation with 17% of Brits admitting they don’t think through financial decisions as well as they did before the Covid-19 pandemic and 21% say they are struggling financially.
Despite the FCA guidance, the scale of the problem appears to have increased – and 39% of people say they are fearful, anxious or concerned that they will be targeted by a scammer. This rises to almost two thirds (67%) for those who have a carer. More than half of UK adults don’t think banks and building societies do enough to help customers who are financially vulnerable, rising to 68% of those who have a carer while 29% don’t know where to get advice, rising to 53% for those who have a carer.
Dr. Dexter Penn, Founder of Kalgera, said: “In the year since the FCA issued guidance for banks and building societies to better protect vulnerable customers it has become clear that the problem has worsened because of the pandemic, rising living costs and opportunistic fraudsters. Most of us know someone who has been targeted by fraudsters; the frequency of more sophisticated scam approaches has rapidly increased as the majority of payments are now digital and cashless.
Added to this, the increase in people using digital services such as online banking – some for the first time – has created more opportunities for fraudsters. More than 4 in 10 (41%) people say they have been targeted by a would-be fraudster since the beginning of the first lockdown (March 2020).
Worryingly, 28% of people admit they don’t feel entirely confident or safe using online banking services while a quarter (26%) have bought something after seeing a sale or promotion on social media or via an unsolicited text or email from a brand unknown to them.
“There is concern that we will see a rapid increase in the number of people experiencing financial vulnerability, which leaves people more susceptible to becoming a victim of financial fraud. To reverse this trend, industries, including finance, technology and healthcare, need to come together to improve the way we detect the drivers of vulnerability and intervene before people are tricked into parting with their hard-earned money,” added Dr Penn.