As the UK came to terms with the scale of the coronavirus pandemic in the first half of last year, unscrupulous fraudsters took advantage of our fear and uncertainty. Between January and June 2020, £58 million was lost to impersonation scams alone.

With so many types of scams out there, knowing which ones exist is the first step in defending yourself against them.

Here is your guide to three of the most common ways scammers might try to part you from your money and the red flags to look out for.

1. Phishing scams

The original coronavirus lockdown in March 2020 saw a rise in ‘phishing’ and ‘smishing’ scams. These are where an email or text message tries to part you from your money.

The scammer will pose as an official body such as HMRC. Common scams have included a claim – purporting to be from the government – that all UK residents will be paid £258 as compensation for disruption caused by the pandemic. Others might warn that you have been fined for breaching lockdown rules.

These messages may appear real. The government did send texts during the initial lockdown and fines are payable for contravening certain lockdown rules, but both of the above are scams. Ignore any links or telephone numbers and delete the message or email.

Other phishing scams might look like legitimate offers of supermarket vouchers, or items for sale, including pets and facemasks. As coronavirus restrictions limited social contact, romance scams rose too. Fake profiles on dating websites cost UK victims £63 million during 2020 according to a Sky News report.

If you have any doubts about a text message or email you receive, delete it, and don’t click any links or ring any telephone numbers included.

2. ‘Push’ scams

According to UK Finance, there were almost 15,000 reported impersonation scams in the first half of 2020, an 84% increase compared to the same period in 2019.

Fraud that involved scammers impersonating bank staff or the police rose even higher, increasing by 94% compared to the previous year. Bank, police, and HMRC impersonation fraud cost UK customers almost £58 million.

This amount might not be surprising. Santander reported last year that 45% of customers would transfer money to a ‘safe’ account if told to over the phone by someone they believed to be in authority.

If you have any doubts about the person you are speaking to, take their details, and hang up. Take the time to research the company or ring back using a number you have found yourself, only if you are confident the caller was genuine.

3. Pension and investment scams

Despite a government ban on pensions cold calling that came into force in January 2019, criminals continue to use the method to try to scam retirees. The ban may not have stopped cold callers, but it does make scammers easier to spot.

Unsolicited calls regarding a pension are highly likely to be fraudulent, so don’t give any personal information out, and hang up immediately.

Pension scammers might offer to help you claim your pension before the current minimum age of 55 (rising to 57 in 2028).

Taking a pension before the minimum age will result in HMRC levying an unauthorised payment charge. You could lose 55% of your pension fund on top of any fees the scammers charged.

If you transfer your funds into a high-risk investment you could lose all your money. The investment could fail, or it might never have existed at all.

Check the company name against the FCA register to see if they are authorised to conduct the business they are offering to do for you.

Warning signs to look out for

There are numerous signs that a pension or investment call might be fraudulent, including:

  • Any unsolicited contact (especially regarding pensions)
  • Phrases such as ‘early pension release’ or ‘free pension review’
  • Any claim of high or ‘guaranteed’ returns
  • Time-sensitive offers or deadlines pressuring you into making a quick decision
  • Unusual or high-risk investments

What to do if you suspect a scam

  • If you are at all suspicious of a telephone call you receive, hang up. Consider taking the name of the company and the name of the caller, then find the company number on a legitimate site. If you can’t find the number or you aren’t sure it is genuine, don’t call back.
  • HMRC won’t call, text, or email you out of the blue. They will almost certainly send a letter first and if they do telephone as a follow-up, they won’t make demands for payment over the telephone.
  • If you are contacted by someone purporting to be from HMRC, visit the HMRC phishing scam page to find out what a potential scam might look like, and if you are worried about a potential scam, forward it to FCA register

If you have any concerns about an offer you receive or you think you have been approached by a scammer contact Action Fraud on 0300 1232040 or the Financial Conduct Authority’s ScamSmart website.

Get in touch

Please contact us if you’d like to discuss any aspect of your finances with our team of Chartered Financial Planners.