September 1, 2016
A new study, which analysed data on over 30,000 UK victims of mass marketing fraud, has shown that victims lose £6,744, on average, during their lifetime. The data analysis also highlighted huge variations in the amount lost between victims, with the majority losing up to several hundred pounds due to mass marketing fraud and one per cent losing more than £100,000 during their lifetime.
It was previously estimated that 3.2 million people in the UK are victims of mass marketing fraud, with indicative figures suggesting that between £1.2 and £5.8 billion could be lost each year.
The study, conducted by the not-for-profit research organisation RAND Europe, was an independent review of the National Trading Standards Scams Team, which helps to tackle mass marketing fraud in England and Wales.
The study showed that older people tended to be the most prominent victims of mass marketing fraud; however, no particular group could be isolated or ignored as potential victims. Mass marketing fraud was found to affect all members of society, regardless of their age, class, occupation, socio-economic background, race or gender.
Mass marketing fraud occurs through unsolicited mailings, emails or phone calls to victims, usually asking for money in exchange for something bigger in return. Forty per cent of adults surveyed in the most recent Crime Survey of England and Wales have experienced some type of unsolicited communication involving the false promises of prizes if up-front payments are made. Common forms of mass marketing fraud fall into four broad categories — lottery and prize draw scams, inheritance scams, money-making scams and the selling of bogus products and services.
Many perpetrators of mass marketing fraud are based outside of the UK, with money being channelled from victims to foreign and offshore bank accounts, making it hard for UK authorities to arrest and punish them. Often these perpetrators are involved in other types of criminal activities, while some are linked to international organised crime, such as selling and franchising models of mass marketing fraud nationally and across borders.
Daniel Schweppenstedde, analyst at RAND Europe, says: “It is clear that relatively inexpensive modes of mass communications, such as telephone and direct mail, have transformed mass marketing fraud and made it a more problematic global issue. Our study shows that mass marketing fraud in the UK can affect anyone and that its costs are significant, but it seems that we could just be scratching the surface. It is highly likely that mass marketing fraud is an even larger phenomenon, with even higher costs to a larger group of victims.”
Louise Baxter, Team Manager, National Trading Standards Scams Team, says: “We welcome this report, which highlights the enormity of the challenge facing trading standards departments in tackling mass marketing scams, a problem which costs consumers £5-10 billion. Scams prevention and protecting consumers is our priority — locally and nationally we are trying to protect consumers in vulnerable situations within our communities and safeguard them from future harm. This report is a step in the right direction in highlighting what steps need to be taken — and where resource needs to be prioritised — to help reduce the impact on consumers.”
Through the study, the Scams Team, widely perceived as the leading organisation in combating “scams”, was revealed to be doing “remarkably well” considering its size and the scale of the problem. A number of policy recommendations were developed by RAND Europe, which could help the team deal with mass marketing fraud in the UK.
- The scope for further legislation which would prevent companies from sharing personal data and enable partners to tackle mass marketing fraud more effectively should be considered.
- At the same time, any barriers that prevent information sharing with and among organisations involved in consumer protection and police forces, both in the UK and internationally, should be removed. This would help to safeguard consumers and also prevent mass marketing fraud from occurring in the first instance.
- Mass marketing fraud should be given more status as an organised crime, with the respective police and crime agencies taking greater responsibility for tackling the issue (and increasing the resources dedicated to this work) since companies active in this area have further ties to money laundering and other organised crime activities.
- More data on the costs incurred due to mass marketing fraud should be revealed, especially local service costs, to highlight the issue as a high priority item for policymakers.
- International co-operation to help fight well-resourced and flexible private organisations and individuals with ties to international crime should continue to grow and be improved upon.
To view the full report visit: http://www.rand.org/pubs/research_reports/RR1510.html
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About RAND Europe
RAND Europe is a not-for-profit organisation whose mission is to help improve policy and decisionmaking through research and analysis. Our clients include European institutions, governments, charities, foundations, universities and private sector firms with a need for impartial research. We combine deep subject knowledge across diverse policy areas including health, science and innovation; defence, security and infrastructure; and home affairs and social policy. Combined with proven methodological expertise in evaluation, impact measurement and choice modelling, we are able to offer quality-assured research and analysis, unbiased insights and actionable solutions that make a difference to people's lives. www.randeurope.org