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Scam or not a scam? 3 potential frauds and how to spot them

Category: News

As we approach the end of this year’s Scam Awareness Month, the need to be vigilant and financially savvy has never been more important.

The speed with which scammers took advantage of the coronavirus pandemic is testament to the lengths criminals will go to and their tactics are always changing.

Between March and July last year, over £11 million was lost to coronavirus scams alone, according to Action Fraud. UK Finance confirms that almost 15,000 impersonation scam cases were reported in the first half of 2020, at a cost to victims of £58 million.

We all like to think that we wouldn’t be taken in by a scam but the Financial Conduct Authority (FCA) reports that 1 in 4 Brits admit to taking 24 hours or less to decide on a pension offer, while 63% would trust someone offering pension advice out of the blue.

Keep reading to find some common scenarios.

1. You receive a call about your pension out of the blue. Scam or not a scam?

Scam. Unless the call is from your financial adviser or your pension provider, this is almost certainly a scammer.

Pension cold-calling was banned in January 2019 meaning that anyone making an unsolicited approach about your pension via telephone, email or text message is breaking the law. The ban hasn’t stopped scammers, but it does make a scam easier to spot.

Hang up immediately, and if the approach is via an email or text, don’t reply to the message or click on any links.

Stay vigilant for these pension scam red flags:

  • Time-sensitive offers designed to rush you into making a poor decision
  • Any mention of “guarantees”, “liberation”, “pension reviews” or “loopholes” that could see you liable for huge tax charges
  • Limited investments or promises of high returns, often in unusual assets or overseas.

Visit the FCA’s ScamSmart website if you are unsure about any company that contacts you and check the FCA register too. If you receive a suspicious email, forward it to report@phishing.gov.uk immediately.

2. Your bank’s fraud department ring to explain that your money is at risk. They ask you to transfer your savings to a “safe account”. Scam or not a scam?

Scam. This is a common type of impersonation scam that encourages you to part with your entire savings, transferring them directly to a scammer’s account.

Criminals can use a tactic called “spoofing” to make the call or text look as though it has come from a trusted source. Emails might also include a link to “dummy” sites that mirror an official company site but are there solely to harvest your data.

Other impersonation scams might include police officers requesting payment of a fine, “compensation payments” from your internet service provider, or “tax rebates” from HMRC. If you receive any call that requests your bank details, whatever the reason, and whoever the caller claims to be, remember that this is likely a scam.

Either hang up immediately or take a name and then find a telephone number for the company on a site you trust and ring them back.

If you think you have fallen victim to a scam contact Action Fraud on 0300 123 2040 if you are in England, Wales or Northern Ireland. If you are in Scotland, you can report the potential crime to Police Scotland by calling 101 or Advice Direct Scotland on 0808 164 6000.

3. You receive an NHS text saying, “we have identified that you are eligible to apply for your vaccine.” Scam or not a scam?

Potential Scam. Since the outbreak of the pandemic unscrupulous criminals have been taking advantage of concern and uncertainty around the virus to try to part people from their money.

Coronavirus-related impersonation scams are rife. The Independent reported back in January that vaccine scams currently present the biggest threat to personal financial security. Jason Costain, head of fraud at NatWest, told the paper: “You are now more likely to be a victim of fraud in the UK than any other crime.”

If you receive a text about a vaccination, even one that looks genuine, be wary of clicking any links. Dummy NHS sites can look genuine but if they ask you for personal information, including your bank account details, leave the site immediately. The vaccination is free, and the NHS will never ask for bank details.

Other coronavirus scams have included fraudsters offering door-to-door testing as a means of gaining access to homes, especially those of the elderly and vulnerable.

The National Cyber Security Centre (NCSC) saw a 15-fold rise in the removal of online campaigns compared with 2019. Dr Ian Levy, NCSC’s technical director, told the Guardian: “The big increase in Covid-19-related scams, fake vaccine shops, fake PPE shops, show […] that criminals have no bounds on what they will abuse and the fear that they engender to try and harm and defraud people.”

Get in touch

Staying vigilant and understanding the red flags to look out for is the best way to protect yourself. At Fingerprint Financial Planning, our trusted and independent advisers can help you avoid financial fraud while giving you the best chance of achieving your long-term financial goals.

Whatever area of your finances you would like to discuss, get in touch by emailing hello@fingerprintfp.co.uk or call 03452 100 100.

Please note

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

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