A Year On from the Online Fraud Charter

Summary

One year ago, the government announced that it was working with online platforms and services, including Amazon, Facebook, Instagram, Snapchat, TikTok, X and Google, to tackle the scourge of online scams. Companies signed up voluntarily to an Online Fraud Charter, committing to take steps to detect and remove fraudulent material on their platforms.

A year on, Which? has conducted new research to explore whether it has been effective in reducing the presence of scams on online platforms.

Our research revealed that online scams remain a significant problem, with millions of consumers falling victim in the past year. The key findings are:

6.6 million consumers have lost money to online scams in the last year since the signing of the Charter
Three-quarters (74%) of victims lost money on platforms that have committed to the Charter - that’s 4.9 million consumers
Nearly half (47%) of consumers are not confident that online platforms are preventing online scams
34% were less likely to trust online platforms now, compared to a year ago

In spite of the commitments made in the Online Fraud Charter, our research suggests that fraud is still rife on online platforms in the UK.

Which? is calling for Ofcom to implement the Online Safety Act in full as soon as possible. The Fraud Minister must ensure a more coordinated approach working with regulators and the tech, banking and telecom sectors to stop the fraud epidemic and protect consumers from harm.

Millions of consumers have been scammed online despite the fraud pledge

In the last six months, one in five (22%) UK adults suspect that they have been exposed to suspicious advertising or messages everyday while being online. This is likely to be several times a day for some people who regularly check social media or look up information using a search engine.

Nearly half (47%) of consumers are not confident that online platforms are doing enough to prevent scams - and they have a point. Over the past year, one in ten (12%) UK adults have lost money to an online scam. This equates to an estimated 6.6 million people.

The most common online scam for those who had lost money was the purchase scam, affecting nearly two-thirds (62%) of victims (see Figure 1). These scams typically involve buying items like clothing or mobile phones through online ads. As a consumer, you reasonably expect the items to arrive and match the description provided at the time of purchase. However, for many people, the reality was far different - the items either never arrived, turned out to be fake, or didn’t match the description in the advert.

While online purchase scams were the most common, other types of online scams also caught people out. Of those who had lost money to an online scam, 22% of victims lost money to online investment scams, such as ‘get-rich-quick’ schemes or cryptocurrency ads, and 18% were tricked by online impersonation scams, where fraudsters posed online as an authority figure, friend, or family member.

Where are scams happening?

Our findings show that 6 in 10 (63%) of those who lost money to an online scam said it started on social media.

Search engines were the second most common platform for scams (42%), likely involving online ads or sponsored content that wasn’t genuine.

Online marketplaces and messaging platforms were also significant avenues for scams. 39% of victims lost money while shopping on an online marketplace, while 23% were targeted on messaging platforms like WhatsApp, often through fraudulent messages designed to build trust and deceive users into sending money.

The majority of online scams are happening on platforms who have signed the Online Fraud Charter

Our research asked scam victims to identify which online platforms they had used when they lost money, focusing on a mix of popular brands, some of which had signed the Online Fraud Charter and some that had not. The findings revealed that 74% of people lost money on platforms that are signatories to the Charter (see Figure 2).

The most common platforms for scams were Facebook (37%), Google (33%), Instagram (20%), Amazon (18%), and WhatsApp (18%). These results raise serious concerns about the effectiveness of the Online Fraud Charter and highlight the need for the government to implement stronger measures to combat online fraud and protect consumers.

How scams are impacting daily life

When people fall victim to a scam, this makes them less trusting of online platforms, and nervous of making purchases through them, understandably. Of those who lost money to an online scam, 58% said they felt more cautious and suspicious when using online platforms, and 34% felt less confident making online purchases.

But even those who have not been scammed are feeling the impact. More than one in three (35%) say they feel overwhelmed by online ads because it’s difficult to tell what’s real and what’s fake. Meanwhile, a similar number (33%) admit they feel anxious when using online platforms, being constantly on edge and unable to relax for fear of falling victim to a scam (see Figure 3).

Consumers do not trust online platforms to keep them safe

A year after the Online Fraud Charter was introduced, we would hope to be seeing actions taken by platforms feeding through to reduced prevalence of fraud, and an improvement in consumer trust. Whilst platforms may be taking steps to tackle online fraud, consumers still find it hard to trust that what they see online is genuine and not a scam. When we asked consumers whether they trust online platforms now compared to a year ago, 34% said they were less likely to trust them. 58% said their trust hadn’t changed and only three per cent of consumers felt more confident using online platforms now than they did this time a year ago. Nearly three-quarters (74%) of people do not feel they can trust whether the ads they see on social media or search engines are genuine or are scams.

The Need for Action

This research highlights that the voluntary Online Fraud Charter is failing to deliver meaningful protection for consumers. Millions of people are still being scammed and trust in online platforms remains at rock bottom. If left unaddressed, we continue to lose millions to fraudsters - taking money from productive firms, reducing overall levels of investment in the UK economy and damaging consumer confidence.

Which? is calling for the Online Safety Act to be implemented in full as soon as possible. The current timetable - which suggests the platforms in scope of the fraudulent advertising duties in the Act may not be held accountable until 2027 - is simply not good enough. Delaying risks letting criminals target millions more people. Lord Hanson, the Fraud Minister, must ensure that the government ends the fragmented approach to fraud prevention and leads a more coordinated approach across the tech, banking and telecoms sectors to better protect consumers from fraudsters.

Methodology

Yonder, on behalf of Which?, conducted an online survey of 2,068 UK adults aged 18+. Fieldwork took place between 8th and 10th of November 2024. The data was weighted to be nationally representative.

Estimated grossed calculations

In the survey 253 respondents (out of 2,068) reported losing money to an online scam. This is equivalent to 6.6million people (6,630,416) when scaled to the total UK adult population using the latest ONS data. Adult lower estimate is 5,864,996 and adult upper estimate is 7,395,836.

Of those, 187 respondents (74% of 2,068) lost money through platforms that have signed the Online Fraud Charter, which equates to an estimated 4.9million. Adult lower estimate is 4,230,833 and adult upper estimate is 5,570,652.

Definition of being scammed online

The research defined ‘being scammed online’ as losing money to a scam. This included situations where people had sent money but didn’t receive the promised item or service, or where the person disappeared after receiving your payment. The figures in this release do not include those who were scammed for other means, such as personal data, or those who realised they were being scammed before any money was lost. This means the actual number of people affected is likely to be higher than what is reported here.

Our data shows that some people may have lost money to more than one scam, so respondents were able to select multiple answer options. As a result, the following statistics will not total 100% for a single question.

When asking respondents about the type of scam they have lost money to, we provided the following definitions.

Purchase scams - I bought an item or service that never arrived, was not as described, or was fake (e.g. clothes, cars, tech, fake holiday rentals, concert tickets etc.)
Impersonation scams - I sent money to someone pretending to be an official authority or company (e.g. Government, my bank), or someone I know (e.g. friend/family)
Dating/romance scams - I sent money to someone I met on a dating site or app who then disappeared
Investment scams - I sent money to a ‘get rich quick’ scheme, crypto currency etc.