Chapter 4: Mass Marketing Fraud Coverage: England and Wales Date: 09 May 2013 Geographical Area: Local Authority and County Theme: Crime and Justice Summary Mass marketing fraud describes activities where uninvited contact is received via email, letters or phone, making false promises in order to obtain money from victims. The 2011/12 CSEW asked respondents if they had personally received any emails, texts, letters or phone calls from an individual or a company they have never heard of before that might have involved a request for money (which will be referred to as unsolicited communication in this section). The main findings from the survey showed: 56% of adults had received an unsolicited communication in the previous 12 months. While this shows that a relatively large proportion of adults were potentially exposed to becoming a victim of these types of fraud, only a very small percentage actually fell victim. Those receiving unsolicited communications were more likely to be aged between 25 to 44; highest rates of receipt were found among those aged 25-34 (63%) and 35-44 (61%). Those aged 75 and over were less likely to receive such communications (40%). Of those who had used the internet in the last 12 months, 62% had received an unsolicited communication compared with 37% of adults who had not used the internet in the last 12 months. A relationship is observed between those adults who received unsolicited communications and socio-economic indicators (income, employment and education), indicating that those employed in managerial and professional occupations, with higher educational attainment and those households with a higher income were more likely to receive communications. It is not clear whether this is because they were more likely to be targeted by offenders or simply that they were more likely to encounter such communication because of more extensive use of the internet and email. The most common type of unsolicited communication was an invite to claim a big win in a lottery, prize draw, sweepstake or competition that had not been entered (40%). This was followed by fraudulent communications offering an investment with a guaranteed high return (16%), or loan on attractive terms (15%). For adults receiving either a lottery or romance 1 fraud communication, half were asked to send/ provide money or details, around a third said they didn t read the communication or listen to the message(s) and around a fifth said they were not asked to do anything. Office for National Statistics 1
A small minority of those who received either a lottery (3%) or a romance 1 fraud communication (3%) and were asked to provide either bank, financial, personal details or to contact the sender, actually replied to the communication. Less than 1% of adults who received either a lottery communication, guaranteed high investment return communication or romance1 fraud communication sent or transferred money. The number of victims is too small to produce any reliable estimates of the scale of victimisation. These may represent underestimates of the true prevalence of victimisation as some victims may have been too embarrassed to disclose this information. Notes for Summary 1. A unsolicited communication which invited the respondent to get to know someone with a view to a possible friendship/relationship and once they ve gained the respondents trust, they ask for money for a variety of emotive reasons. Introduction This chapter focuses specifically on Mass Marketing Fraud which is defined here as an uninvited contact received via emails, letters, phone or adverts, making false promises in order to obtain money from victims (referred to as unsolicited communication in this section). This is wide ranging and captures a number of different types of fraud. A person does not have to benefit from the fraud to be guilty of the offence. As soon as they have made a dishonest/false misrepresentation, they have committed a fraud. Mass marketing fraudsters try to lure victims with false promises of large cash prizes, goods or services in exchange for upfront fees. These can range from foreign lottery and sweepstake frauds (which target individuals with false promises of prizes provided that upfront payment is made for fictitious fees and taxes) through to romance fraud (whereby fraudsters feign romantic intentions towards internet daters to secure trust and affection, in the hope of ultimately obtaining money) 1. There is concern that mass marketing fraud is becoming a more serious, complex and a growing crime, both in the UK and across the globe. The Office of Fair Trading (OFT) carried out research in 2006 where they reported that almost half of the UK adult population (48%) were likely to be targeted by some kind of scam and they estimated that UK consumers lose about 3.5 billion to scams every year. The 2011/12 Crime Survey for England and Wales (CSEW) included a module of questions which asked respondents about their experience of mass marketing fraud. The CSEW asked respondents if they had personally received any emails, texts, letters or phone calls from an individual or a company they have never heard of before that might have involved a request for money. The questions in the survey are designed to distinguish between legal (although unwelcome) junk mail and attempts at fraud. Those respondents who said that they had never read or listened to the messages (around 7% of those asked the initial questions) have been excluded from all analysis presented here. This chapter looks at the percentage of adults who have received such unsolicited communications and explores their characteristics. Further questions on whether the respondent replied to the Office for National Statistics 2
communication and whether any money was subsequently transferred were asked of those respondents who received the following type of communication: A big win in a lottery, prize draw, sweepstake or competition that they haven t entered., The chance to make an investment with a guaranteed high return (e.g. shares, art, fine wine etc.) Invite to get to know someone with a view to a possible friendship/relationship. Due to the nature of this crime it is thought to be under-reported. There are a range of explanations for this, including: victims feeling embarrassed and ashamed; some victims are unaware they are victims (it takes law enforcement, such as the Serious Organised Crime Agency (SOCA) to reveal it to them); and in some cases those who do attempt to report the crime may be turned away as it may not always be clear which is the most appropriate organisation to which a specific fraud offence should be reported. Notes 1. Further information on specific examples of mass marketing fraud can be found in the NFA Fraud typologies and victims of fraud. Experience of mass marketing fraud The 2011/12 Crime Survey for England and Wales (CSEW) estimated that 56% of adults received an unsolicited communication in the last 12 months. This is unsurprising given the mass-marketed nature of the unsolicited communications. Large numbers of unsolicited mailings, e-mails or telephone calls can be disseminated to individuals whose details are obtained from a purchased mailing list or via automated calling systems or harvested email 1 addresses. Most recipients will recognise the approach as a scam and ignore it but a small percentage will send off money and make the scam profitable. Any one can be targeted by fraudsters as generally scams are customised to fit the profile of the people being targeted (Office of Fair Trading, 2006). There is some evidence 2 to suggest that the majority of unsolicited communications are received via email, with letters and phone calls being the next most frequent method of communication, although this varied depending on age of the person targeted. Table 4.1 shows findings from the 2011/12 CSEW on the different types of unsolicited communication and the percentage of adults who have received these. Office for National Statistics 3
Table: 4.1 Proportion of adults experiencing each type of unsolicited mass marketing communications received in the last year, 2011/12 England and Wales A big win in a lottery, prize draw, sweepstake or competition that you haven t entered The chance to make an investment with a guaranteed high return Percentage 40 16 A loan on very attractive terms 15 Someone who invites you to get to know them with a view to a possible friendship or relationship Help in moving large sums of money from abroad A job offer, a franchise offer or other business opportunity 13 12 10 Help in releasing an inheritance 9 An urgent request to help someone get out of some sort of financial trouble 8 Adopting or buying a pet 3 Some other type of similar request 7 No communication received 44 Unweighted Base 42,232 Table notes: 1. Source: Crime Survey for England and Wales, Office for National Statistics. Download table XLS format (32.5 Kb) According to the 2011/12 CSEW the most common type of unsolicited communication was an invite to claim a big win in a lottery, prize draw, sweepstake or competition that had not been entered (40%). This was followed by making an investment with a guaranteed high return (16%), then a loan on attractive terms (15%) (Table 4.1). Office for National Statistics 4
Some respondents received more than one type of unsolicited communication. The 2011/12 CSEW showed that 54% of adults who received an unsolicited communication received 2 or more different types, 14% received 5 or more (Table 4.2). Table 4.2: Number of different types of unsolicited mass marketing communications received by a respondent, 2011/12 England and Wales percentages One 46 Two 21 Three 12 Four 8 Five or more 14 Table notes: 1. Source: Crime Survey for England and Wales, Office for National Statistics. 2. Percentages may not add to 100 due to rounding. Download table XLS format (23 Kb) According to the survey those receiving unsolicited communications were more likely to be aged between 25 to 44; highest rates of receipt were found among those aged 25-34 (63%) and 35-44 (61%). Those aged 75 and over were less likely to receive such communications (40%) (Appendix table 4.01 (829 Kb Excel sheet)). This could be related to the way fraudsters target people as other research suggests email is the most common way of reaching people and younger/middle aged people are more likely to use email. The pattern seen above was similar for men and women, although men were generally more likely to have received unsolicited communications than women for each age group (Figure 4.1). Office for National Statistics 5
Figure 4.1: Proportion of adults receiving unsolicited mass marketing communications in the last year by age and gender, 2011/12 Notes: 1. Source: Crime Survey for England and Wales, Office for National Statistics. Download chart XLS format (18.5 Kb) Appendix tables 4.01 and 4.02 (829 Kb Excel sheet) shows the proportion of adults who received an unsolicited communication by personal and household characteristics. A relationship is observed between those adults who received unsolicited communications and socio-economic indicators (income, employment and education), indicating that those employed in managerial and professional occupations, with a higher educational attainment and those households with a higher income and were more likely to be targeted by fraudsters. It is not clear whether this is because they were more likely to be targeted by offenders or simply that they were more likely to encounter such communication because of more extensive use of the internet and email. For example the survey showed that: Office for National Statistics 6
Adults in managerial and professional occupations were more likely to have received unsolicited communications (68%) compared with those in routine and manual occupations (47%) and those that had never worked or who were long-term unemployed (36%). Analysis by household income showed a clear linear pattern with the likelihood of having received unsolicited communication increasing with a households rising income. For example, 72% of respondents living in a household with an income of over 50,000 received at least one unsolicited communication compared with 46% of those in households with an income of below 10,000. The characteristics of those adults targeted by fraudsters are very different to the characteristics of victims of overall crime, where victimisation rates are typically higher among those in lower income groups, and in areas of higher deprivation. The pattern observed for mass marketing fraud (is also seen in plastic card fraud) may suggest that offenders committing these newer emerging crimes are targeting different groups of the population. However, the pattern may also be influenced by the level of internet usage and email among these different groups. The 2011/12 survey showed that: Of those who had used the internet in the last 12 months, 62% had received an unsolicited communication compared with 37% of adults who had not used the internet in the last 12 months. Respondent characteristics were similar across the different types of mass marketing fraud covered in the survey, though for some types of fraud the differences were more pronounced (Appendix tables 4.03 to 4.08 (829 Kb Excel sheet)). For example, for romance fraud where a respondent was invited to get to know someone with a view to a possible friendship/relationship 3 : Only 1% of adults who were over 75 were targeted compared with 21% of 25 to 34 year olds. Of those who had used the internet in the last 12 months, 16% had received a romance fraud communication compared with 0.4% of adults who had not used the internet in the last 12 months. Looking specifically at guaranteed high investment return communications: Men received more communications (21%) compared with women (12%), this was also identified in OFT s report in 2006. Notes 1. Email harvesting is the process of obtaining lists of email addresses for use in bulk email. 2. See Mass marketing fraud section of the Annual Fraud Indicator 2012 3. Articles for additional research on romance fraud What adults were asked to do and their actions Those respondents who had experienced specific types of mass marketing were asked additional questions about what they were asked to do and if they responded. Due to constraints on Office for National Statistics 7
questionnaire length, these additional questions were only asked of those who had experienced one of the following: A big win in a lottery, prize draw, sweepstake or competition that you haven t entered. The chance to make an investment with a guaranteed high return (e.g. shares, art, fine wine etc.). Invite to get to know someone with a view to a possible friendship/relationship referred to as romance fraud. Table 4.1 shows that according to the 2011/12 CSEW, 40% of adults received a communication relating to a big win in a lottery, prize draw, sweepstake or competition that they had not entered, 16% received a communication relating to an investment with a guaranteed high return and 13% received a communication where they were invited to get to know someone with a view to a possible friendship/relationship. Where respondents had received unsolicited communication relating to a big win in a lottery, prize draw, sweepstake or competition that had not been entered or an invite to get to know someone with a view to a possible friendship/relationship, the survey collected further information on whether and how they responded. Questions were asked specifically on whether or not respondents were asked to send/transfer any money, to provide any bank, financial or personal details or to contact the sender. Of those adults who received either lottery or romance fraud communications, half were asked to send/provide money or details, around a third said they didn t read the communication or listen to the message(s) and around a fifth said they were not asked to do anything (Table 4.3). Table 4.3: Proportion of adults asked to send money or provide any details for those receiving either a lottery or romance fraud communication, 2011/12 England and Wales percentages Type of communication: Lottery Romance Asked to send money or provide personal/bank details 50 50 Not asked to send anything 18 19 Didn't read the communication/ listen to all the message 32 31 Unweighted base 16,219 4,816 Table notes: 1. Source: Crime Survey for England and Wales, Office for National Statistics. Office for National Statistics 8
Download table XLS format (23.5 Kb) Of those adults who received a lottery communication and were asked to provide something, 58% were asked to provide their bank details and 53% were asked to contact someone. Of those who received a romance fraud communication and were asked to provide something, 67% were asked to contact someone and 40% to provide bank details (Table 4.4) 1. Table 4.4: What adults were asked to send for those receiving either a lottery or romance fraud communication, 2011/12 England and Wales percentages Type of communication: Lottery Romance Provide bank details 58 40 To contact them/someone else 53 67 Provide any other personal information (e.g. address, passport number) Send or transfer money (including Western Union) Provide any other financial details (e.g. credit card, Paypal account) 40 38 35 32 31 27 Unweighted Base 7,767 2,392 Table notes: 1. Source: Crime Survey for England and Wales, Office for National Statistics. Download table XLS format (24 Kb) A small minority of those who received either a lottery (3%) or a romance fraud communication (3%) and were asked to provide either bank, financial, personal details or to contact the sender, actually replied to the initial communication (data not shown). Less than 1% of adults who received either a lottery communication, guaranteed high investment return communication or romance fraud communication sent or transferred money (data not shown). Office for National Statistics 9
Therefore while the 2011/12 survey shows that a relatively large proportion of adults were potentially exposed to becoming a victim of these types of fraud, only a very small percentage actually fell victim. The number of victims is too small to produce any reliable estimates of the scale of victimisation. These may represent underestimates of the true prevalence of victimisation as some victims may have been too embarrassed to disclose this information. Notes 1. Respondents could answer all categories that applied to them. Background notes 1. If you have any queries regarding crime statistics for England and Wales please email crimestatistics@ons.gsi.gov.uk. 2. Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: media.relations@ons.gsi.gov.uk The United Kingdom Statistics Authority has designated these statistics as National Statistics, in accordance with the Statistics and Registration Service Act 2007 and signifying compliance with the Code of Practice for Official Statistics. Designation can be broadly interpreted to mean that the statistics: meet identified user needs; are well explained and readily accessible; are produced according to sound methods; and are managed impartially and objectively in the public interest. Once statistics have been designated as National Statistics it is a statutory requirement that the Code of Practice shall continue to be observed. Copyright Crown copyright 2013 You may use or re-use this information (not including logos) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit www.nationalarchives.gov.uk/doc/open-government-licence/ or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gsi.gov.uk. This document is also available on our website at www.ons.gov.uk. Office for National Statistics 10