In 2021, fraudsters stole £1.3 billion from consumers, according to a UK Finance report. The loss can be devastating to victims, both financially and emotionally. As criminals use increasingly sophisticated tactics, it is more important than ever that you’re aware of the red flags.
This huge sum is despite the efforts of the banking and finance industry to prevent losses. In 2021, for example, the industry prevented £1.4 billion from ending up in the hands of criminals.
These figures highlight the scale of fraud taking place in the UK and why it’s vital that you take steps to protect your assets.
The data can be broken down into two types of fraud – unauthorised and authorised.
1. Unauthorised fraud: In 2021, victims lost £730.4 million to unauthorised fraud. While the figure is lower than in 2020, UK Finance still describes it as a “major problem”. It refers to when fraudsters use your details without your knowledge or consent, such as stealing your card details to make online purchases. If you’re a victim of unauthorised fraud, you are legally protected – 98% of victims received full refunds, according to the report.
2. Authorised fraud: It’s becoming more common for fraudsters to deceive you into making payments. This is known as “authorised fraud” and victims lost £582.2 million through these scams in 2021. Impersonation scams, where a criminal will often pretend to be from a trusted organisation, such as the NHS or your bank, account for 40% of authorised scams. As you’ve authorised the payments, you are usually not protected and many victims lose the money they’ve handed over.
The report also stated, “much of the fraud is initiated from criminal activity taking place through online and technology platforms”.
It’s essential you question the information you see online. Fraudsters often use emails, websites, or social media posts that look professional, and it can be difficult to instantly spot a scam. Criminals using online platforms often rely on you making a quick decision, so you overlook the red flags.
4 things to keep in mind to avoid losing your wealth to scammers
1. Do your research before you make payments
If you’ve received communication to make a payment out of the blue, spend some time investigating it first, even if it appears to be legitimate.
Scammers may impersonate HMRC claiming you owe tax, for instance. A call to verify the claim could prevent you from falling victim to a scam. If the claim is legitimate, reputable organisations will understand why you want to clarify the details.
As well as unexpected contact, a sudden change in details should also be a red flag.
Perhaps you’re working with a conveyancer to purchase a property and they’ve requested you make the final payment to a different account. If something like this happens, you should call the organisation directly to confirm the changes before you make any payment.
2. Take your time
Criminals rely on you taking their communication at face value. They will often try to rush you or place you under pressure, such as offering time-limited offers. This means you’re more likely to overlook the warning signs.
Take your time when you’re making financial decisions and don’t be afraid to ask questions, request information, or simply say you need some time to think about your options.
3. Look at offers objectively
If someone is offering you something, like an investment opportunity with guaranteed returns or a way to access your pension early, it can be tempting. However, try to look at these objectively – is the offer too good to be true?
Taking a step back to assess what a scammer is presenting can mean you spot the signs that some things are not as they first appear.
4. Act immediately if you think scammers have targeted you
While you may think you’ll never fall for a scam, criminals can catch you unawares when your mind is on something else.
If after talking to someone, something doesn’t seem right, don’t be afraid to call up the organisation to check the details. Just a few minutes can put your mind at ease or alert you if a scammer has targeted you.
If you’ve made a payment and realise you overlooked red flags, report it immediately. Get in touch with your bank first as they may be able to prevent the payment. You should also contact Action Fraud to report the crime.
Contact us if you have concerns or questions
Scammers may provide enticing opportunities to encourage you to hand over your money, and it can be difficult to spot them. If you’d like to talk about an opportunity you have and how it could fit into your overall financial plan, please contact us.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.