A recent report has found that 51% of UK adults have been affected by scams in the last 12 months. According to Canada Life, that amounts to around 27 million people who have either received a suspicious communication or know someone who has.
Back in March, we looked at how to avoid romance scams as numbers rise and recent figures confirm the crime is still costing victims millions each year. So too are other types of fraud, with new scams introduced all the time by criminals continually adapting to changing norms and economic climates.
As the cost of living crisis looks set to bring financial woes for many this Christmas, some scammers are even capitalising on the government’s Energy Bill Support Scheme to extort money.
So, where are the biggest scam losses coming from and how can you protect yourself this Christmas and into 2023?
Keep reading to find out.
Scam numbers remain worryingly high
MoneyAge recently confirmed that total fraud losses for the first half of 2022 alone exceeded £600 million.
Authorised push payment (APP) fraud accounted for almost £250 million of stolen money in that period. The UK Finance Annual Fraud Report states that losses from this type of scam totalled more than £583 million in 2021.
APP fraud involves scammers tricking you into making a payment to them. You might be contacted by someone purporting to be from your bank or another organisation that you regularly make payments to.
Separately, FTAdviser warns that investment fraud rose by 50% in 2021. City of London police has warned consumers of the rise in social media “get rich quick” scams. Often influencer-fronted, these scams are most likely to affect young professionals (below the age of 40).
The report goes on to confirm that around £891 million was stolen through fraud during 2021/22. With just over 26,000 reported cases, the loss for each individual was around £34,000 on average.
As you may have read at the end of last year, you shouldn’t underestimate the wellbeing impact of financial scams and it’s important to remember that the financial loss is just half of the picture.
5 simple ways to keep your money safe
1. Hang up on pension cold-callers
Pension cold-calling has been banned in the UK since 2019. While the ban won’t stop you from receiving unsolicited pension calls, it does mean that you can immediately hang up.
Pension scammers will often try to get you to transfer your pension or offer to release your pension funds early. So-called “pension liberation” could result in you losing your whole pension fund or finding yourself liable for a 55% HMRC unauthorised payment charge (on top of any fees the scammers charge you).
2. Don’t reply to unsolicited messages or click on any links
If you receive an email or text that looks suspicious, you should simply delete it. If it purports to be from HMRC, though, you might consider forwarding it to report@phishing.gov.uk before you do.
You might open these messages by accident. If so, be careful not to click on any links as they could plant viruses on your device or take you to a clone site that looks genuine but is designed to harvest your personal data.
3. Be wary of time-sensitive offers and “guarantees”
One tactic that scammers will use is to hurry you into making a quick decision. They will do this by offering once-in-a-lifetime, time-sensitive offers or “guarantees” with imminent expiry dates.
Remember that no professional would ever rush you into a decision and that you should take all the time you need.
Complete due diligence on the firm that has contacted you, and the service they are offering, and be sure to speak to us.
4. Remember that HMRC will only contact you by post
Following the announcement of the government’s Energy Bill Relief Scheme, scammers have attempted to contact potential victims to make non-existent payments. The scammers might claim to be from the government or your energy supplier.
Remember that HMRC will not contact you by email, text, or phone so any contact via these methods is highly likely to be a scam.
Many other organisations too, will have agreed on methods of contacting you, and a legitimate company will rarely – if ever – ask you to divulge personal information over the telephone.
5. Always check the FCA register to ensure a firm is genuine
The FCA holds a Financial Services Register of authorised firms so be sure to check it if you are approached by an unfamiliar company. You can also use it to check if the firm has the appropriate permissions to advise on the type of transaction they are offering to support you with.
Dealing with non-regulated firms means that the company might not comply with UK regulations. Your money also won’t be protected by the Financial Services Compensation Scheme (FSCS).
If you are worried that you have fallen victim to a scam you can report the incident to Action Fraud and be sure to also visit the FCA’s Scam Smart pages for further information.
Get in touch
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.
