Scam victims suffer psychological harm costing £9.3bn

Scam victims in the UK face a hit to their well-being that can be calculated at £9.3 billion every year, new research from Which? has found.

According to the consumer company, it conducted a study amid concerns that the full impact of all scams on victims has been “seriously underestimated.”

It said that to date, attention has been largely focused on the most serious financial losses, while the significant psychological harm experienced by victims who lose smaller sums or get their money back has been neglected.

Which? analysed more than 17,000 responses to the Office for National Statistics’ Crime Survey for England and Wales to establish the well-being impact associated with being scammed. The results were then applied to an approach to assessing social impacts approved by the Treasury earlier this year. The model allows researchers to value changes in well-being in monetary terms.

As well as a drop in life satisfaction, the research revealed that being a victim of fraud was also associated with significantly higher levels of anxiety and lower levels of happiness. It was also associated with people self-reporting worse general health, although to a much smaller degree.

The research found the estimated average drop in well-being for victims of fraud is the equivalent of £2,509 per year. This estimate is even higher – £3,684 – for online fraud.

This well-being impact is substantially more than the average financial sum lost to fraud, estimated by Which? as around £600.

When these calculations are applied to the 3.7 million fraud incidents in 2019-20, they suggest a total loss of well-being associated with fraud victimisation of £9.3 billion per year.

Online fraud specifically was associated with a well-being impact of £7.2 billion.
Which?’s director of policy and advocacy Rocio Concha will set out the findings to MPs on the Draft Online Safety Bill Joint Committee in an evidence session on Monday.

“Our research shows that scam victims suffer a significant drop in well-being when they are targeted by criminals,” said Concha. “This brings home the scale of the emotional and psychological harm that victims suffer when they are defrauded.

“The government must not ignore the huge impact an epidemic of fraud is having on our society. Scam adverts must be included in the Online Safety Bill and ministers must set out plans for laws and regulations that will make online platforms use their highly sophisticated technology to effectively tackle harmful content on their sites.”

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