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How to keep yourself safe from financial scams

Category: News

Budget airline EasyJet confirmed last month that the personal information of nine million customers had been accessed in a sophisticated cyberattack. According to a Guardian report, more than 2,200 of those customers had their credit card details stolen.

Elsewhere, the BBC reports that the cost of fraudulent Universal Credit claims could amount to as much as £1.5 billion. It blames organised crime groups – and some individuals – who have taken advantage of relaxed processes designed to help those in urgent need during the coronavirus pandemic.

Action Fraud and the National Fraud Intelligence Bureau saw complaints rise in tandem with Covid-19. Beginning in February and spiking in mid-March, coronavirus-related scams in that period alone account for potential losses of nearly £970,000.

By mid-April, that figure had risen to more than £2 million.

Who are scammers targeting? What kind of scams do you need to be on the lookout for? And what can you do to protect yourself?

Remember that we’re here to help. If you think you might have been contacted by a scammer or worry about the legitimacy of an offer you have received, get in touch.

Coronavirus scams

Some scams have related directly to the virus, including offers of non-existent face masks. The Independent reports that in one incident, a member of the public spent £15,000 on face masks which never arrived.

Other scammers used the virus indirectly, offering investments that can take advantage of the economic downturn caused by market reaction to the virus.

Other reported scams include emails offering tax refunds, claiming to be from the government or the NHS.

The arrival of the UK’s test, track and trace system (test, track, and protect in Scotland) has also led to concerns. Might fraudsters be able to use the system to contact and obtain the private information of unwitting victims?

How to protect yourself

Scams are constantly evolving but there are many things you can do to help protect yourself against fraud:

  • Ignore cold calls, emails, or texts

Cold calling relating to pensions was banned in January 2019 and it now carries a fine of up to £500,000. This means that no genuine company or organisation will ever call you about your pension out of the blue.

That doesn’t mean that you won’t receive cold calls though. The number of phone scams reported in the UK in 2019 according to Which? was 195,720 – more than 300% higher than in 2018. SMS text message phishing scams rose 56% in the same period, from 36,950 in 2018 to 57,579 in 2019.

The safest way to protect yourself from cold calling scams is to ignore all unsolicited approaches. Don’t open suspicious texts, click on email attachments, or on links that appear in pop-up windows. And hang up the phone to cold callers, or better still don’t answer at all.

Some numbers might be displayed on your phone to look like legitimate organisations. This is known as a ‘number spoofing’ scam. Be very wary, even if you suspect the call is genuine.

Remember that companies such as your bank or HMRC would never ask you to provide your PIN or account details over the phone. If you suspect a scam but aren’t sure, hang up and ring the organisation yourself. Scammers can stay on the line so be sure to leave it at least ten minutes before calling back and use a different phone if you can.

  • Be wary of ‘guarantees’

Pension scammers will often look to part you from your pension fund by offering ‘guaranteed’ investment returns. They might also use phrases like ‘free pension review’, ‘savings advance’ or ‘loophole.’

Your pension is only available from age 55 and anyone claiming to be able to ‘release’ pension funds before that date is most likely trying to scam you. Unauthorised pension payments will result in huge tax charges.

Also, be wary of any unusual or high-risk investments. These are often located overseas and are therefore unregulated and offer no protection. The company you speak to may confirm that they are FCA regulated, or that FCA regulation is not required.

You can use the Financial Services Register to check whether the person you’re dealing with is FCA registered and authorised to provide the service they are offering. If you’re unsure, speak to us. We know the tactics scammers use and have the means to check whether an approach is genuine.

But remember, if you’re approached out of the blue, that is a cold call. Cold calls on pensions are illegal and therefore will not be legitimate.

  • Be suspicious of time-limited offers

Scammers will often put you on the back foot, trying to rush you into making a quick decision. They will tell you a special offer is available only for a limited time, or that there are only a set number of people able to take advantage of a specific opportunity.

Take your time to consider any offer you receive and do background checks.  Don’t be rushed into making a decision and speak to us before you do. You could visit the FCA’s ScamSmart website for further tips on spotting scams.

  • Keep your personal details secure

From shredding bills and bank statements to checking your social media privacy settings, there are many small steps you can take to help keep yourself safe.

Lock any important documents away and shred any that you are throwing out.

Choose your passwords carefully. Make sure they are secure by using a mixture of upper- and lower-case characters, numbers, and symbols and do not share your passwords with anyone.

Also, be sure to password-protect your home Wi-Fi and avoid using public computers or Wi-Fi hotspots.

  • Be vigilant

The most important thing you can do is to be aware that scams exist and stay alert.

If an offer seems too good to be true, it probably is. If you are approached by a company or individual you don’t know, whether via telephone, text, or email, ignore it.

If any doubt, remember the FCA’s Financial Services Register and ScamSmart website. They can help you confirm whether an approach is genuine and if the service being offered is within current regulations, and therefore FCA protected.

And then speak to us. We are financial experts and can offer sound advice regarding your long-term financial plans, giving you peace of mind that whatever you are doing with your money, it is right for you.

Get in touch

If you would like to discuss any aspect of your financial plans, get in touch. Please email or call 03452 100 100.

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