Article by Phil
The Pension Scams Action Group (PSAG) has recently sent the best financial advisors a list scam warnings.
Almost 40% of all crime in the UK is now related to some form of financial fraud. So, what types of scams do you need to look out for according to the PSAG. Here’s the Top 10:
- Impersonation Fraud – where a fraudster pretends to be someone else, like your bank or even HMRC and asks you to transfer your money because you’ve been targeted by a scammer. This has been around a long time but is still up there near the top of the fraud tree.
- Crypto scams – where fraudsters offer crypto investment opportunities (most of which offer too good to true investment returns). Then don’t buy any crypto on your account and don’t return your money. Estimated to have cost people in the UK over £1 billion. Be careful around crypto.
- Courier scams – where the fraudster pretends to be the police or your bank and says that you’ve been the victim of a scam and need to make a transaction to help catch the fraudster.
- Social Media scams – where a fraudster appears to offer goods and services online tricking you into making payments, but where the companies don’t exist. Always check the company URL address to see if it looks genuine.
- Romance scams – mostly online where fraudsters befriend you often with the promise of romance and then start asking for cash to help with their problems.
- Investment scams – where fraudsters offer too good to be true investment returns in return for quick investments. Often in offshore companies which can’t be traced. The best financial advisors would never do this.
- Payment diversion fraud – where an additional digit is added to an e mail address often on an invoice, which then diverts the payments to a fraudulent account.
- Abuse of trust fraud – when a family member or friend puts pressure on you to give them money or borrow money for them.
- Authorised Push payments – where people are tricked into sending money to a fraudulent account. Affecting over 200,000 people every year.
- Quishing scams – a relatively new type of scam involving QR codes. Scammers have developed fake QR codes which link to scam websites allowing fraudsters to access your personal data.
Keeping up to date with all the latest financial scams is a full time job even for the best financial advisors. But there are a few simple signs to be aware of and rules to apply if you want to keep your money safe. These include:
- Too good to be true – if you are being offered returns way in excess of anything else advertised by mainstream brands you should be on alert.
- Overseas investments – often also too good to be true but think about it. How are you going to get your money back from overseas if something goes wrong. What protection is there for you?
- Crypto – also in the too good to be true category. Do you ever wonder why the people telling you that you can grow your money five- or ten-times inn a couple of months are still working if it’s so easy?
- Money transfers – a golden rule. If someone is asking you to transfer your money somewhere or to make a large payment, stop and think about it. No main Bank or Investment company would ask you to transfer your money to another account.
- Online – the easiest and cheapest way to be tricked is through an e mail or social media. It costs the scammers nothing. If you are in any doubt, ask them to send you a letter.
- Time sensitive offers – if something needs to done quickly in order to secure the deal it’s 99% likely to be a scam. Don’t fall for it.
- Fear of missing out – this is the scammers main tactic. Making you think that you could be missing out on the best offer out there. You aren’t missing out. You are being scammed.
If you are in any doubt, ask someone for their opinion. A family member or friend. Or search online for one of the many voluntary and charity organisations who are there to help.
Since we published this article, news of another type of scam has broken. We’d describe this as an assistance scam. In this case scammers are contacting investors who’ve already lost money through failed investment schemes, offering to help them recover their losses. This then leads to the scammers asking for further payment to cover legal costs and to capture the individuals bank and personal details. This type of scam is a double whammy preying on those who are already scam victims. The FCA has advised investors to be wary. The latest scam has targeted investors in the failed London Court Whisky Scotland Bonds scheme. (FT Adviser 20/6/24)
