Protecting Yourself Against Financial Scams

 

The old adage about thieves and opportunism certainly rings true through the coronavirus pandemic. A significant increase in the number of financial scams lies amongst the fallout of Covid-19, with 15,000 impersonation scams reported in the first half of 2020. An impersonation scam happens when a victim is tricked into making a payment to a fraudster posing as a trusted organisation. This could include a financial institution such as your bank, HMRC, the police or a utility company. Between January and June 2020, an estimated £58 million was lost to this kind of scam.

It’s important to remember that this can happen to anyone. Financial scams can be very sophisticated, with these criminals often experts in their trade. What’s more, ‘phishing’ is now so commonplace that it’s easy to get caught out if you don’t know what to look out for – and even if you do. However, that doesn’t mean you can’t take steps to protect yourself. The first thing is knowing what scams are out there.

Impersonation scams

This kind of scam sees criminals impersonating a trusted institution. You might receive a text message, phone call or email claiming you have been a victim of fraud, you are owed money or there has been a security breach on your account. Often the criminal will pressure you to transfer money to a ‘safe account’ to protect your money. These messages often look legitimate, but you can still look out for:

  • Any correspondence telling you to enter your personal information, PIN code, password or bank details – your bank, government institutions or the police will never contact you to ask for personal details over the phone, email or text message
  • Messages containing embedded links – these can lead to a fraudulent website or infect your device with malware
  • Names or email addresses that are unfamiliar, misspelt or unlikely to contact you
  • Anything telling you to act immediately – criminals know that mistakes are made when victims are put under pressure

Investment scams

Action Fraud reported that one of the most common scams to catch consumers out last year was investment scams. 17,000 reports of investment fraud were reported between September 2019 and 2020, “involving £657.4m in losses, up 28% on the previous 12 months.” Investment scams ask victims to put money into a fake fund or fictitious investment. These scams will often appear as ads on social media or search engines, offering low-risk, high return investments in the guise of trusted companies. Some criminals will even transfer the promised amount into your account, luring you into making an even bigger investment further down the line.

Take Five to Stop Fraud is a national campaign helping people to recognise and prevent fraud. When spotting investment fraud, the campaign advises consumers to look out for:

  • Ads you see on social media offering high returns for little or no risk
  • Investment opportunities exclusive to you
  • The pressure to act fast

The campaign also lists a number of useful resources and further advice on fraud prevention, both for businesses and individuals. However, the overriding message is clear: you will never be contacted out of the blue to ask for your PIN, personal details or to move money into a separate account by a trusted institution. But when you’re under pressure, it’s easy to forget. So, pause, take five and think.

However, if you do fall victim to a financial scam then you should contact your bank immediately on a number that you know is correct – you’ll find this on your statement or on the back of your card. It’s also worth reporting it to Action Fraud on 0300 123 2040 or at actionfraud.police.uk.

Again, anyone can fall victim to a financial scam, so you need not feel embarrassed if it does happen to you. If you have any questions or would like to talk to one of our financial planners, please don’t hesitate to get in touch over email at enquiries@gpfm.co.uk or call 01992500261. 

This article is for information only and must not be considered as financial advice. We always recommend that you seek independent financial advice before making any financial decisions. Investments can go down as well as up and you may get back less than you invested.

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About gpfm

gpfm are an independent financial planning company dedicated to the provision of personal, professional, and objective-driven advice for our clients. We have been awarded the Chartered Financial Planners title by the Chartered Insurance Institute for offering high quality, independent and informed advice that meets the needs of our clients.