Online fraud costs Brits £14.8bn, and systems to protect shoppers ‘not providing value for money’
The UK is failing to keep up with online fraud, which cost consumers billions last year
THE National Audit Office has warned that the UK is failing to keep up with online fraud, and systems put in place to protect shoppers do not yet provide value for money.
According to NAO, consumers lost at least £14.8bn last year through online scams, of which £4.2bn is thought to be through mass marketing fraud and counterfeit goods.
Systems put in place to protect customers from online fraud receive millions of pounds from the government each year.
Local Trading Standards, for example, received around £124m in government funding, while Citizens Advice received£18m.
But, the system as a whole "has not yet demonstrated that it provides value for money in protecting consumers from modern scams, unfair trading and unsafe goods," NAO said.
Although National Trading Standards, which was set up in 2012, had made a "good impact" into consumer protection - preventing £345 million worth of losses since April 2014, NAO said funding for this remained small compared with the size of the problem.
It said that the system was not keeping pace with the growth in online consumer fraud within the the UK's e-commerce market, which is the third largest in the world.
It went on to say that the Competition and Markets Authority was also making a "good" impact, generating at least £74 million of direct financial benefits to consumers each year at a cost of £6 million.
Amyas Morse, head of NAO, said that progress had been made since its 2011 report, but as the threats consumers face becoming ncreasingly wide-ranging, the system has not kept pace with the changes, leaving consumers inadequately protected in a number of areas.
"While the improvements are welcome, the system as a whole has not yet shown it provides value for money," she said.
In response to the report, Leon Livermore, chief executive of the Chartered Trading Standards Institute, said: “The amount spent on trading standards has fallen from £213 million, in 2011, to £125 million today, so it’s not surprising the system is struggling to cope.
“It has left consumers inadequately protected and has helped to set the conditions for issues like the horsemeat and hoverboards scandals and the ongoing problems with Whirlpool and VW.
“However, the report does recognise the benefits of enhanced coordination and in particular the work of the Consumer Protection Partnership and National Trading Standards, which has shown that trading standards can have a significant impact on a regional and national scale.
“We stand ready to support the government and work with our partners to implement the recommendations in the report.”
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