Social media and internet an emerging threat in fraud

Social media and the internet is transforming the criminal landscape in counterfeit goods and other fraud scams as eCrime becomes more prevalent, a new report reveals.

According to National Trading Standards’ annual Consumer Harm Report, criminals are increasingly diversifying their approaches, and capitalising on opportunities provided by the internet and the accompanying regulatory uncertainty.

The movement of intellectual property crime and product safety issues to the online world is being deemed an emerging threat, with social media providing the means to target a larger pool of potential victims, the body said.

Intelligence from National Trading Standards (NTS) showed that organised and sophisticated criminals were increasingly choosing the internet and social media as a platform of preference.

“Criminal activity patterns change with advancements in technology and online crime is a growing problem; the NAO report points out that online fraud is now the single most reported crime with around 70 per cent of fraud being linked to online activity,” Lord Toby Harris, chair of NTS, said. “These criminals – many belonging to organised crime groups – are diversifying their methods, exploiting the latest trends and technologies, and are more sophisticated and better at circumventing the law than ever before. The evolving nature of criminal activity against consumers and legitimate businesses means that every day we are at risk of falling victim.”

Particular trends included search engine advertising – where dodgy adverts appear above legitimate sites when a person searches online – and adverts on social media feeds that mimic genuine promotions and direct the consumer to fake websites.

In recent separate media reports, social media giant Facebook has been singled out as failing to remove promotions and postings of counterfeit goods from its platform, even after receiving official warnings from the NTS. Mike Andrews, from the NTS eCrime team, told The Sunday Times Facebook was making money from the advertisements of fake goods.

The NTS Consumer Harm Report also noted that the rise of social media and the internet has led to the emergence of Fulfilment Houses, which process, package and distribute goods that have been bought online. They are often used by businesses based abroad who are shipping items to the UK, and make legal responsibility for the items – many of which are dangerous and counterfeit – more complicated, it said.

Last year, NTS funded projects targeted at high-risk Fulfilment Houses, which included seven joint investigations with HM Revenue & Customs. Two of these joint operations resulted in the Fulfilment House closing down, preventing tens of thousands of dangerous goods reaching UK consumers, the report said.

Figures from the NTS report show that in the 2016/2017 year, 104 criminals were convicted, which is the most NTS has secured in one year, and nearly 550,000 unsafe items were prevented from entering the UK, a 22 per cent increase on last year, including products such as skin lightening creams containing mercury, a batch of tooth-whitening products with the highest levels of hydrogen peroxide ever seen by NTS, dodgy electrical products, and counterfeit ‘Marvel’ branded clothing.

The body’s eCrime team also removed more than 180 fraudulent websites and 500 fraudulent Twitter accounts, while uncovering potential fraud of over £1m during 2016-17. The team is working with partners and the National Markets Group on Operation Jasper, which targets the sale of counterfeit and dangerous goods on social media. The team has also targeted individual sellers on Facebook and Instagram, which has expanded as larger traders in the supply chain have been uncovered.

“In 2018 the NTS eCrime team will continue to work closely with social media platforms in shutting down criminal sites and posts, whilst the NTS Safety at Ports & Borders Teams continue to identify and detain dangerous products entering the supply chain,” the report said.

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