A policy of reimbursing scam victims with money from criminals’ frozen bank accounts is being considered by the government.
The proposal from banks would be a popular one, according to survey results which found that 75 per cent said they would support the idea.
But criminally-obtained funds in frozen accounts would be vastly insufficient to cover the bill. Total fraud reached £1.26bn in the UK last year while the amount in the frozen accounts was last estimated to be around £130m, it is reported.
Online shopping scams have risen during the pandemic. One in four adults have been bombarded with scam attempts on a daily basis according to the result of a YouGov survey of 1,700 people.
Older people have been identified as particularly vulnerable as almost of a third of over-65s reported the same in the survey.
Ministers announced they were considering the idea of using criminal funds to repay scam victims in a report on economic crime published last month by the government and the banking trade body UK Finance.
To date banks have bourne the brunt of providing refunds to customers whose accounts have been hacked into and stolen from.
A code was agreed and signed between banks in 2019 to make sure those affected by ‘push payment’ fraud were refunded if they had not done anything wrong.
Push payment scams are when victims are tricked into transferring their money to a criminal, in the belief that they are a legitimate trader or service.
The agreement affected the customers of 19 financial brands but the banks could not agree on a scheme to create a permanent central pot of funds to repay victims and opted to pay for reimbursements individually instead.
The news comes amid reports of online dating scams and romance scams also soaring during the coronavirus pandemic.
Analysis by consumer group Which? found that romance fraud reports were up by 40 per cent in the year to April of this year, compared with the previous year, with more than 7,500 reported scams.
Reported losses reached £73.9mduring the period – but the true figure is likely to be much higher as many victims are too embarrassed or upset to tell the authorities.