Online fraud is the most prevalent crime in England and Wales and is too widespread for authorities to solve, a report has found.
The Public Accounts Committee report said the Home Office cannot solve the issue, which has an estimated cost of £10bn, on its own.
Only 20% of online fraud is reported to police and banks have been accused of not doing enough to tackle the problem.
Sky News has spoken to a man who lost hundreds of thousands of pounds to online fraud.
Approaching 60, Simon – as we are calling him – had been looking forward to retirement.
He had worked hard all of his life, had paid off his mortgage and had a good pension. Then he met a woman online, and for a year built up a friendship with her.
He felt comfortable sending her money, confident that her requests would help her and her brother in Ghana.
Image: Tony Sales’ company We Fight Fraud offers advice on how to combat the financial crime
She told Simon the payments would help her release family gold held by a bank.
“It started with £4,000, then the story evolved, then it was £3,000 here, £2,000 there,” explains Simon, who describes himself as “streetwise”.
“I sent £201,000 to be exact, over a period of three years… I had to sell my house, my pension, I drew that, and borrowed 20 grand off the bank, which I’m still paying back today.”
Simon, from Nottingham, is so embarrassed that he fell for the scam that he doesn’t want us to use his real name, but he does want to warn others not to fall for it.
He said: “I was foolish. I got depressed, I lost my job through it all… if anyone gets in touch with you about anything, you will lose money, you will never ever see it again.”
As Simon rebuilds his life; now working six days a week, 12 hours a day, the scammers still try to contact him, confident that they cannot be traced.
:: Online fraud ‘overlooked’ by authorities and industry, warns watchdog
The PAC report has found that there were two million cyber-related frauds last year, making it the most widespread crime in England and Wales.
“This isn’t something that Government can tackle alone but it has quite an important role in co-ordinating action,” PAC chairwoman Meg Hillier MP said.
“So the police obviously will pick up reports of crime and then they need to be able to help spread the information so that they can prevent it, the banks have a serious role in security and also helping to make sure people are less likely to fall victims to scams.”
The report also found that advertising campaigns have been ineffective and that banks need to share more information.
Stephen Jones, from UK Finance, which represents the banking sector, said “current legislation does not provide adequate safeguards for this”.
Tony Sales, once dubbed “Britain’s greatest fraudster”, told Sky News the internet is a “fraudsters’ playground”.
Sales made £30m through fraud, but after spending time in prison he set up We Fight Fraud, a company which offers help to banks, retailers and individuals.
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He said: “Well the banks could be reconciling at the other end, so, you know, when transactions happen, you know, it’s quite easy for a bank to see where the money is going.
“If people are ripping it off and they are using this information, the banks have to get wiser and educating people in what to actually do with this information instead of just trying to shift liability back onto the consumer.”