Scammers were quick to take advantage of the coronavirus pandemic when it arrived in the UK at the start of 2020. As concern grew, fraudsters were only too happy to play on the worries of consumers to part them from their savings.
Action Fraud announced a 400% increase in reports as the UK went into lockdown in March 2020. The increase wasn’t confined to investment scams either. Pensions scams, romance scams, and of course, those that relied specifically on uncertainty around the pandemic, all rose.
Despite this huge rise in scams during 2020, the first half of 2021 saw investment scams alone rise by 95% compared to the same period in 2020. Other types of scams have also experienced increases.
While we would like to think that we would never fall for a scam, as scammer’s methods become ever more sophisticated, the likelihood of falling victim continues to rise.
Keep reading for your look at some of the most common scams out there, and the red flags to look out for to make sure you don’t fall victim.
1. Pension and investment scams
Pension scams are arguably among the easiest to spot. Pension cold-calling was banned in 2019, which means any telephone call, text or email you receive out of the blue about your pension is almost certainly a scam.
The ban hasn’t stopped fraudsters from trying to access your pension fund though.
Between March and October last year, 44% of respondents to the FCA Financial Lives 2020 survey felt that they had received more unsolicited approaches than before coronavirus. Pension scams were thought to account for around a third of scams at the outset of the pandemic.
According to Action Fraud figures, published by FTAdviser, the average loss of those who fell victim to a pension scam was £50,949 in the first half of 2021. That is more than double the average for the first half of 2020.
Remember that cold-calling is banned and that if an investment sounds too good to be true, it likely is.
You can use the FCA register to check if a firm that contacts you is regulated by the FCA and if they are authorised to complete the process they claim to be doing on your behalf.
2. Impersonation or automated push payment scams
Impersonation scams, also known as automated push payment scams, involve a fraudster pretending to be a trusted body and persuading you to part with your money. This will usually be through a bank transfer straight to the fraudster’s account.
Calls, texts, and email scams were rife at the outset of the pandemic. Scammers might pretend to be from HMRC requesting your bank details to provide you with a one-off coronavirus grant. Others claimed to be from the police asking unsuspecting victims to pay a fine for breaking lockdown rules.
In their 2021 Half Year Fraud Update, UK Finance report that losses due to authorised push payment scams increased 71% for the first half of this year, compared to the same period in 2020. Total losses amounted to £355.3 million.
Bank and police scam cases saw the biggest increase, rising 129%.
If you receive a call claiming to be from your bank or the police, remember that neither party would ever ask for bank details, passwords, or other personal information. If you have any concerns at all, take a name and then ring the caller back using a number you have found yourself, or simply hang up.
If the scam has arrived via email or text message, be sure not to reply and do not click on any links. You can forward HMRC emails to phishing@hmrc.gov.uk to report them as a potential scam. Also, be sure to check the FCA’s ScamSmart site.
3. Romance scams
A form of push payment scam, romance scam losses have seen a 62% rise during the first half of 2021 compared to last year.
The months of lockdown last year are likely to account for the more than £21 million lost to these scams. The figure for the first half of 2021 stands at £15.1 million.
Romance scams involve a victim being duped into forming a relationship remotely – either via dating websites or through social media. Once trust has been gained, the scammer will begin to ask for generally small, but regular, payments.
While these types of scams account for only around 4% of overall push scams, the abuse of trust over an extended period make these types of scams particularly insidious.
UK finance recommends the following steps to protect yourself:
- Never send money to someone you haven’t met in person
- Research the person you are talking to, and check if their profile pictures and details are genuine
- Keep contact restricted to the dating site or messaging service until you’re confident the person is who they say they are and only ever meet in a public place.
If you think you have been the victim of a scam visit www.actionfraud.police.uk or call 0300 123 2040.
Get in touch
Your money is hard-earned and at Hartsfield financial advisors Bristol we want to ensure it goes towards providing you with the financial future you have always dreamed of.
As scammers grow increasingly sophisticated in their approaches, praying on our concerns – whatever they may be – it is important to remain vigilant. Always keep in mind the possibility of a scam and think carefully before you give your personal information away or part with your cash.
If you would like to discuss keeping your money safe and building a long-term plan to make your retirement and investment goals a reality, please get in touch and find out how our team of expert planners can help.