When the coronavirus pandemic arrived in the UK back in March 2020, scammers were quick to take advantage.
In January 2021, you might have read our guide to ‘3 common financial scams and how to avoid them’ in which response to rising scam numbers. We also provided useful information on the warning signs to look out for and what to do if you become suspicious.
Worryingly, figures released by UK Finance for the first half of 2021 show that fraud numbers continue to rise, with scammers adopting increasingly sophisticated methods.
Keep reading for your look at recent figures, plus how you can prevent yourself and your loved ones from falling victim.
Scam numbers continued to rise in 2021
UK Finance’s 2021 half-year report found that scammers stole nearly £754 million through fraud in the first half of 2021. This was a rise of 30% compared to the first half of 2020 when coronavirus scams rose rapidly.
More recently, figures reported by the BBC found a 17% rise in all reported scams in the last three months and a 70% increase for the final three months of 2021.
Not only are the numbers of scams rising, but the amounts involved are significant too. While the average loss from a purchasing scam is around £930, victims of investment scams in the fourth quarter of 2021 lost an average of £15,788.
Red flags to watch out for and what to do next
1. Be wary of any unsolicited contact
Pension cold calling was banned in 2019. This hasn’t stopped scammers from making unsolicited approaches, but if you receive contact regarding your pension out of the blue, it is highly likely to be a scam.
Criminals use phone calls, text messages, and emails to contact you, hoping to harvest your personal data.
During the pandemic, scams included text messages purporting to be from the police, the NHS, and HMRC. Some accused the recipient of breaking lockdown rules, while others promised one-off “Covid payments” from the government.
Be sure not to reply to text messages or emails and don’t click any links. You could be led to a fake site intended to gather your data. Criminals are sophisticated and the website you arrive at is likely to appear genuine.
If you think you have received a scam text message or email, delete it immediately. If the email you receive claims to be from HMRC, you can forward it to phishing@HMRC.gov.uk to help them alert other potential victims but be sure to delete the message immediately after.
HMRC’s phishing page has examples of scam texts and emails so you know exactly what to look out for.
2. Authorised push payment (APP) scams might appear “too good to be true”
If you receive an offer of a “too good to be true” investment opportunity, be sure not to make any hasty decisions.
Scammers will likely use enticing claims of high or “guaranteed” returns and will try to pressurise you into a quick decision by offering time-sensitive or “once in a lifetime” offers. The investment opportunity might be unusual or high-risk and could include investments overseas that aren’t subject to UK regulation.
These types of APP scams could see you transfer money into a bad investment with the very real risk of losing it all. Worse, you might find that the investment never existed at all, leaving you open to transferring your hard-earned assets directly to the scammers.
If you are at all suspicious, take the name of the company calling you and then search for them online. If you find what looks to be a legitimate site, you might consider telephoning back but be sure to do so from a different phone. And don’t allow yourself to be pressured into making a quick decision.
You can use the FCA register to see if the company is regulated and if they are authorised for the specific transactions they are offering.
Get in touch
UK Finance’s report makes for sobering reading, highlighting just how sophisticated scammers are becoming. Despite increased awareness of the existence of scams, and the red flags to look out for, numbers are rising and scammers are still destroying lives.
Stay wary of any unsolicited contact or offers that appear too good to be true and complete due diligence even if you are feeling pressured into making a quick decision.
We can help you put a long-term financial plan in place that aligns your pensions and investments to your long-term goals and your attitude to risk.
You’ll know you are dealing with people that you can trust and we’ll review your plans regularly to ensure they are on track, communicating with you at every stage of the process. Contact us now to find out how our Chartered financial planners could help you.
Please note
The value of your investment 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. Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor.
