Four arrests have been made as part of an investigation into computer software service fraud, thought to cost hundreds of millions of pounds worldwide.

Through a collaboration between the City of London Police and Microsoft, the investigation has been looking into the tens of thousands of reports of software service fraud made each year.

It often involves the victim being contacted and told there is a problem with their computer and that, for a fee, the issue can be resolved.

But no fix occurs and once the fraudster has access to the victim’s computer they can install software which could potentially be malicious.

Data for the financial year 2016/17 shows there were 34,504 computer software service fraud reports made to Action Fraud, the national fraud and cyber reporting centre, with estimated losses of £20m.

That accounts for 12% of all reports to Action Fraud, making it the third most reported fraud type, with the average loss suffered being £600 and the average age of victims 62.

A 29-year-old man and a 31-year-old woman, from Woking, Surrey, were arrested on suspicion of fraud and both have been bailed. A 37-year-old man and 35-year-old woman were arrested in South Shields, Tyneside, on suspicion of fraud and were later released pending further enquiries.

Commander Dave Clark, City of London Police and National Co-ordinator for Economic Crime, said: “These arrests are just the beginning of our work, making the best use of specialist skills and expertise from Microsoft, local police forces and international partners to tackle a crime that often targets the most vulnerable in our society.”

The analysis has shown that many of the calls originate in India and that the worldwide losses from victims are thought to be in the hundreds of millions of pounds.