28 January marks Data Privacy Day, an international event designed to raise awareness of data protection and help consumers keep their personal information secure.
Research from NatWest reveals that in the first half of 2024, £570 million was stolen through scams. With fraudsters’ tactics evolving all the time, controlling how your information is collected, stored, and used is key to preventing its misuse.
Keep reading to discover some common scams, red flags to watch out for, and why Data Privacy Day is the perfect time to learn about how to protect your finances and your wellbeing.
Online scams are common so learning how to protect yourself is key
Ofcom revealed last year that almost 9 in 10 online adults in the UK (87%) have come across content they suspected to be a scam or fraud.
There are some important steps you can take to protect yourself and your data.
Choose your password carefully, and don’t share it
Your password is essentially the first line of defence against data breaches. As such, it’s prudent to use a combination of letters, numbers, and symbols to make it harder to crack.
NordPass states that your password should ideally be 20 characters long, have a combination of uppercase and lowercase letters, and contain special symbols.
Scammers can use “social engineering” to gather information about you, so don’t use personal data in your password. Reusing the same password for multiple accounts is also bad practice, as one compromised account could mean that hackers access all your data in one go.
Once you’ve set a strong password, keep it safe and don’t share it with others.
The importance of two-step verification
Two-step verification can add an extra layer of security to your data by requiring a second form of identification to log in, such as a code sent to your phone or email.
This simple yet effective measure could significantly reduce the likelihood of unauthorised access to your accounts.
Learn how to identify phishing emails
“Phishing” emails and “smishing” texts try to trick you into clicking malicious links or providing personal information that hackers can use against you. They do this by appearing to come from legitimate organisations.
Learning how to identify and avoid these emails could help you keep your data secure. Some of the red flags to stay vigilant for include unsolicited messages, urgent language, or unfamiliar numbers and email addresses.
If you are in doubt, it’s always worth contacting the organisation directly using verified contact information from their website.
3 common types of fraud to look out for
1. Investment scams
Scammers might act as representatives of a legitimate company, offering exciting opportunities to grow your wealth. These investments might be incredibly high risk, or not exist at all, leaving you significantly out of pocket.
Worryingly, Barclays reveals that investment scams account for £1 in every £3 claimed by victims.
Promises of “guaranteed” returns, contact out of the blue or “once-in-a-lifetime” offers that require you to act now are all red flags. Be sure to check the FCA register before acting to check that an investment is legitimate.
2. Pension scams
Despite a ban on pension cold-calling in 2019, fraudsters might still call you out of the blue in an attempt to steal your pension wealth.
They may encourage you to take your pension early using a “loophole” to avoid a tax liability. This type of scam is known as “pension liberation” and could see you pay HMRC unauthorised payment charges as well as losing your invested fund.
It’s generally not possible to access your retirement fund before the normal minimum pension age, which stands at 55 as of 2024/25, rising to 57 from April 2028. Anyone claiming otherwise could be a scammer.
3. “Mum and Dad” scams
“Hello mum” scams were the fifth-most common type of fraud in 2024.
Indeed, 37% of respondents to Barclays’ survey stated that they have either fallen victim or known someone who has been targeted personally by this scam.
Fraudsters pose as your child while contacting you over text or WhatsApp. They might claim to have lost their phone, need money for an emergency, or be locked out of their banking app and need you to pay a bill for them. Typically, they’ll send you bank details, with any payment you make going directly to the scammer.
Always call the person requesting money to confirm their identity before you make any payments.
Scams can affect you mentally as well as financially
Being scammed doesn’t just affect your finances; it can also have profound emotional consequences.
Research from Which? shows that:
- 71% of scam victims reported increased stress
- 60% experience a decline in their mental health.
This is partly due to the stigma surrounding scams, which can result in victims feeling silly or ashamed, making it harder for them to seek help.
Contact us
If you do fall victim to a scam, it’s vital to act fast. You should contact the police by dialling 101 (the non-emergency number) and notify your bank of your losses, as your report could prevent others from being targeted.
At Globe IFA, we can act as a sounding board for evaluating “once-in-a-lifetime” investment opportunities or changes to your retirement plans, helping you to make informed decisions.
Please email hello@globeifa.co.uk or call us on 020 8891 0711 to discuss how Globe IFA’s expert financial advisors can help you.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.