Scams: 3 you must know about and clever ways to protect your money
According to a recent article in City A.M., residents and businesses in Britain lost £2.5 billion to fraudsters and cybercrime between November 2020 and November 2021. On average, there were 40,586 cases reported a month, with an average financial loss of £5,700 on each case.
The report brings home just how determined criminals can be when it comes to stealing your hard-earned cash, a fact that’s even prompted social media firms to take action.
In December 2021, FTAdviser revealed that Twitter, Meta – previously Facebook – and Microsoft will require financial companies to be authorised by the Financial Conduct Authority (FCA) in order to advertise with them.
This is not a moment too soon either. The latest half year fraud report by UK Finance, released in September 2021, shows that during the first half of the year there was a 30% increase in fraud and scams when compared to 2020.
Alarmingly, investment fraud nearly doubled during the period. Read on to discover three scams that criminals are increasingly using and how to better protect your money.
1. Authorised push payment (APP)
In the first half of 2021, fraudsters stole £355.3 million using this method – up 71% on the previous year. These scams are where you’re tricked into paying criminals money, with purchase scams being the most common form of APP.
2. Impersonation scams
This is where criminals contact you by sending out texts and emails posing as delivery companies or officials from the NHS or government departments. These scams increased 123% during the period when compared to 2020, costing Britons £129.3 million.
3. Unauthorised fraud
These crimes are where criminals take money out of your account without your knowledge. More than £398 million was stolen using this method, a 7% increase on the same period in 2020. More worryingly though, UK Finance also reported that attempts were made to also steal a further £736 million.
Investment scams also increased
At the beginning of 2021 criminals stole £107.7 million using investment scams, according to UK Finance. This is an increase of 95% on the year before. A key reason for this was investors being enticed by adverts on social media offering high returns on investments.
If you invest without advice from HarperLees as part of your portfolio, always take care when you see an advert that interests you. Remember, you can always call us to discuss the investment, and we’d be happy to help confirm whether it’s genuine and right for you.
Now we’ve looked at some of the most common types of scams, read about how criminals typically try to contact you and how you could better protect your money.
Search engines can be a scammers’ paradise
According to Which?, search engines have become an “easy hunting ground” for criminals looking to target your money using paid-for adverts.
Fake adverts on search engines can be difficult to spot, especially as fraudulent adverts typically offer returns slightly higher than standard rates for investments. This makes them attractive without setting alarm bells off.
If you see an advert offering “best rates” you should always treat it with suspicion.
Beware of bogus investment companies
If you have DIY investments alongside the investments you have with us, be aware that criminals set up companies to imitate genuine investment firms. These “cloned firms” are used by scammers to offer products that may not exist, are extremely high-risk, or charge excessive fees.
Alternatively, the investments may exist, but the fraudster keeps your money. To make it difficult for you to tell their bogus company apart from the real one, criminals may:
- Provide a company number that matches a legitimate firm on the FCA register
- Use the same address in emails and correspondence
- Provide realistic-looking fact sheets or prospectuses
- Follow compliance procedures similar to reputable companies, including asking for copies of ID and personal documents
- Set up a fake online account.
There are two ways you can check a company you may be considering:
- Use the Financial Conduct Authority’s warning list to ensure the company is genuine. If it’s not registered, cross-reference with the FCA register to double-check whether the firm is bona fide and if it can offer the products it’s advertising.
- Call us at HarperLees. We’d be happy to help you confirm the legitimacy of the company, and whether the investment is right for you.
Tell-tale signs you’re talking to a scammer
While scammers are very sophisticated and extremely plausible, they still rely on a series of tricks to make their reason for contact more believable, or panic you into a decision you regret.
Whether they have contacted you under the guise of a government or bank official, or you’re talking to them about investments, always look for the following signs:
- Company literature that’s full of grammatical errors and spelling mistakes
- Vague contact information and the use of PO boxes
- A website address that doesn’t look right
- Being asked to provide personal information
- The person you’re talking to being pushy or aggressive
- Being told a financial product is time-limited or in short supply
- A sense of urgency is created
- Substantial returns are promised.
Get in touch
While the above could help you identify fraudsters, the most effective way to guard against scammers is to speak to us. We can confirm the authenticity of any financial product and adviser you’re speaking to.
Just email us at info@harperlees.co.uk or call on 01277 350560, we’d be pleased to help.
Please note
This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The value of your investments (and any income from them) 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. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
