The UK Finance half-year fraud report for 2023 makes for grim reading. In the first half of last year, criminals stole £580 million, while banks prevented a further £651 million of fraud thanks to their state-of-the-art security systems.
With Safer Internet Day (6 February) fast approaching, it’s worrying to note that 77% of Authorised Push Payment (APP) fraud – more on which later – started online.
Scammers are forever adapting their tactics, but thankfully, there are steps you can take to keep yourself safe from online fraud.
From knowing the types of tactics scammers use to improving your own internet security, here are some important factors to consider.
3 common types of financial scams to be aware of
- Phishing scams
Phishing scams are those that originate via email, while the relatively newer “smishing” scams will arrive through a text message.
The fraudster will look to convince you that their message is from an official body, like HMRC, the police, or your doctor. The scammer might put pressure on you to reply, through mention of overdue fines or the chance for a one-off payment.
Emails might include company logos to appear real and they could even link to clone websites. These will appear genuine but in reality, they are a front to harvest your personal data.
- Authorised Push Payment scams
APP fraud, as it sounds, is when you authorise a payment to a scammer. This might be a purchase scam, where you pay for goods that never arrive, or in response to a call or email that you think is from a trusted source, like your bank.
Back in 2020, as coronavirus left consumers worried and on edge, scam volumes rose. At that time, Santander reported that 45% of customers would transfer their money to a “safe” account if a caller purporting to be from their bank asked them to do so.
In the first half of 2023, losses from this type of scam amounted to £239.3 million, of which £196.7 million were losses to individuals.
- Pension and investment scams
Pension cold-calling has been banned since 2019 but fraudsters continue to ignore the new rules.
Pension investment scammers might claim to be able to “liberate” your pension early, before the HMRC minimum retirement age. Or offer a “guaranteed” investment opportunity which, if it exists, is likely to be high risk. If it doesn’t exist, you might find you’re simply transferring your would-be investment directly to the fraudster.
While the cold-calling ban is being flouted, it does make spotting a potential fraud easier.
3 scam red flags to look out for
- Unsolicited contact
The government’s cold-calling ban means that any unsolicited contact you receive about your pension is highly likely to be a scam.
Official correspondence will arrive by mail and your pension provider won’t telephone, email, or text you out of the blue. Ignore all such contact. The same applies to someone arriving at your door.
- Promises of “guaranteed” returns
However a scammer chooses to approach you, any offer of guaranteed returns should be treated with extreme scepticism.
This is especially true if the “opportunity” is in an unusual investment, or the offer contains jargon designed to confuse.
You’re well aware that markets fluctuate daily and that the investments we put in place for you are carefully aligned with your risk profile and your goals.
While risk can be managed, there is no such thing as guaranteed returns. Remember that if an offer appears too good to be true, it probably is.
- Time-sensitive offers
Offers with a tight deadline should also raise a huge scam red flag.
Financial decisions are not to be taken lightly and require due diligence and careful thought.
Time-sensitive offers are designed to pressure you into rushing (or omitting) these important steps to avoid missing out on a “once-in-a-lifetime deal” or “never-to-be-repeated rate”.
No genuine organisation would look to apply this kind of pressure so see this as a warning and back away.
3 ways to sidestep scammers and keep yourself safe
- Hang up, shut the door, and don’t reply or click links
The simplest way to deal with a potential scammer is to cut off all contact, either by hanging up, shutting the door, or deleting a suspicious email or text.
This is especially true if the contact concerns pensions, as unsolicited pension contact is banned.
If you feel confident, you can forward suspicious text messages to 7726. If the suspicious email purports to be from HMRC you can forward it to phishing@hmrc.gov.uk and help HMRC provide warnings to other potential victims.
- Complete due diligence
If you are suspicious of a contact you receive, look the company up to see if their details check out.
An email might contain the company logo and look legitimate but does the email address of the sender match the format on the official website? Are there spelling or grammatical errors you wouldn’t expect from a company of its size?
You might take the name of the caller and then find the company number before calling them back. If possible, do so from a different phone.
If the company is in the financial sector, check the FCA register to confirm that they are registered and that they are authorised to conduct the specific business they are offering.
- Ensure your passwords are complex, secure, and kept safe
A simple way to keep yourself, your data, and your money safe online is by taking the time to choose strong passwords. Opt for a long and complex string of numbers, lower- and uppercase letters, and special characters.
Avoid personal information like your name, date of birth, or favourite sports team.
Don’t write your password down or share it with anyone else. Instead, use password managers to generate and store complex passwords.
Finally, if a site offers two-step verification, use it. This is usually an additional step, such as a passcode, after a username and password. Sometimes one additional barrier is all it takes to dissuade a would-be scammer.
Get in touch
If you are worried you might have been the victim of a scam, visit the FCA’s ScamSmart website or call Action Fraud on 0300 1232040.
For general queries about keeping your money safe, or to speak to us about the specifics of your long-term plans, get in touch with us now. Please email us at beyourself@murphywealth.co.uk or give us a call on 0141 221 5353.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
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