People experiencing mental health problems are less likely to get their money back and are more than twice as likely to fall into debt as a result of fraud.
Last month, Which? reported on the financial toll of fraud and worrying gaps in protection, but this tells only half the story — there can also be long-lasting emotional and even physical consequences, often most keenly felt by those who are already struggling.
In June, Which? Money surveyed 1,008 people who had fallen victim to fraud in the past two years and had lost money as a result. Here we expose the disproportionate impact of fraud on vulnerable people.
The devastating consequences of fraud
In our survey, 71% of fraud victims told us their experiences had had a detrimental impact on their stress levels; 63% said it was harmful to their mental health, and 39% said it had affected their physical health.
Fraud victims were more likely than the overall population to report getting little pleasure in doing things, feeling down or depressed, having trouble falling or staying asleep and feeling tired.
‘It was horrific,’ one person told us. ‘I lost my job because of it, and a lot of other things in my personal life went downhill. I still feel like it impacts my trust in people.’
Another said they felt ‘stupid and ashamed to be scammed’, which has ‘led to bouts of depression and anxiety’.
Fraud and mental health
We found that people who had been professionally diagnosed with a mental health problem at the time of the fraud were paying a particularly heavy price.
They were twice as likely to report having to borrow money from friends and family (31%), not having enough money for essentials (29%) and falling into debt (26%) as a result of their experiences, compared to victims with no diagnosed mental health problems.
Even though banks and other firms should take particular care to protect vulnerable customers, only 58% of people experiencing mental health problems said they got some or all of their money back, compared with 68% of victims with no diagnosis.
Almost one in five (19%) felt embarrassed about reporting the incident to their bank, resulting in some victims staying silent, crimes not being logged and fraudsters going free.
People with mental health problems were also more likely to say they didn’t report the fraud to their banks because it was too much hassle (16% versus 7%), or they previously had a bad experience when reporting fraud to them (19% versus 8%).
And they were less likely to have taken a complaint about the fraudulent incident to the Financial Ombudsman Service, a free service that settles complaints between consumers and financial businesses.
What to do if you're a victim of fraud
Reporting fraud is important to help stop criminals, and to prevent others from falling victim to the same scam.
If you've lost money to a scam, contact your bank or building society as soon as possible.
You should also tell Action Fraud, the reporting centre for England, Wales and Northern Ireland by calling 0300 123 2040 or filing a report online. If you live in Scotland you can report a scam directly to the police by calling 101.
Being a victim of fraud can take a huge toll on your mental health, so make sure you talk to someone to get the support you need.
- The charity Victim Support offers a free and confidential helpline on 0808 168 9111 (lines open 24/7).
- Samaritans provides free and confidential support, call its helpline 116 123 (lines open 24/7).
- Mind also has a support line, Mind Infoline, available on 0300 123 3393 (lines open 9am-6pm, Monday-Friday).
New proposals should help fraud victims
While there are strong legal protections for unauthorised fraud, there is currently only a voluntary industry code covering cases where people are tricked into transferring money to an account controlled by a criminal – known as authorised push payment (APP) fraud.
Which? campaigned for mandatory reimbursement after repeatedly warning that the voluntary approach created a reimbursement lottery, and the government listened.
The new Financial Services and Markets Bill requires the Payment Systems Regulator (PSR) to introduce an obligation on banks and other payment providers to reimburse victims of bank transfer scams.
Under PSR proposals announced last month, banks will be forced to reimburse anyone who loses more than £100 to bank transfer or payment fraud, apart from in exceptional circumstances.
This should mean the vast majority of victims are fully reimbursed – putting an end to the reimbursement lottery. And any fraud victims deemed to be vulnerable should be reimbursed without exception.
Which? calls for fair and consistent redress
Which? says the regulator must be ready to ensure banks are treating customers fairly and consistently, and prepared to take tough enforcement action against those who breach the rules.
We are also calling on the government to prioritise scam victim protection in the Online Safety Bill and ensure it returns to Parliament as soon as possible. Which? has previously estimated that the cumulative cost to wellbeing of online fraud is £7.2bn per year.
Rocio Concha, Which? director of policy and advocacy, says: 'Our survey shows fraud victims experiencing mental health problems are being failed, with devastating effects on their wellbeing and finances. New rules to make reimbursement of bank transfer fraud mandatory can’t come soon enough.
'They must be backed with tough enforcement measures for any banks that flout them and fail to treat their customers fairly. The government must also bring the Online Safety Bill back to parliament quickly to ensure vital protections against the flood of fraudulent adverts on the world’s biggest social media sites and search engines become law.'
- Find out more: Facebook repeatedly sells ad space to known scammer
Which? surveyed 1,008 victims of fraud in the UK who had lost money to it in the last two years. Fieldwork was carried out online by Focaldata in May-June 2022 and data has been weighted by age and gender to be representative of victims of fraud using data from the ONS Crime Survey. In the survey, respondents were asked if they were asked if they had been professionally diagnosed with a mental health disorder.
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