There’s almost nothing more important when it comes to your money than keeping it safe. Unfortunately, professional scammers are always finding new ways to trick you into parting with your hard-earned savings and investments.
That’s why it’s important to keep up to date with the latest scams, so you can recognise them and protect yourself before it’s too late.
Make sure you familiarise yourself with these current scams so you don’t fall victim to them.
Fraudsters use pension scams to try and convince you to part with your retirement savings. Typically, they involve a scammer who attempts to fraudulently convince you to move your retirement savings to somewhere else. The scammer then keeps this money.
The FCA and The Pensions Regulator reported that savers have lost a total of just under £31 million to pension scammers since 2017, leaving holes in many people’s hard-earned retirement pots.
Pensions scams have been rife during lockdown, too; Aviva found that pension scams made up 16% of all suspicious scam activity between March and July 2020.
Scammers use all sorts of techniques to access your savings, but some common traits of pension scams are:
- Telling you that you can access your pension early
- Asking you to move your pot to a different provider
- Asking you to put your pension savings into complicated schemes
- An offer of unrealistic returns.
One example from FT Adviser saw a vulnerable customer transfer his entire pension to a complex scheme after he was approached by an unknown pension “adviser”.
The scheme supposedly allowed him to access his pensions funds tax free before the age of 55. It turned out to be untrue, with this “adviser” actually being a scammer.
In this case, the customer was able to get his money back. However, you may not always be this fortunate so it’s vital to be vigilant, especially when strangers contact you out of the blue with offers for your pension.
Fake investment opportunities are commonplace and can be very expensive if you fall into a scammer’s trap.
Action Fraud found that investors lost over £650 million to investment fraud from September 2019 to September 2020.
Investing fraud can be tricky to spot, but some tell-tale signs are:
- A promise of enormous and unrealistic returns with no risk
- Quick returns that are simply not possible
- An unknown investor approaching you directly with a limited-time offer.
The best tip for investment fraud is that if the opportunity looks too good to be true, it probably is.
“Push-payment fraud” is where scammers use the threat of time pressure to force you into acting without giving you time to properly think through your decision.
Unfortunately, as so many people fall victim to scams like this every year, it remains to be one of the most pervasive. In the first half of 2020, savers lost more than £205 million to scams like this.
Push-payment scams are often cold calls, texts and emails that warn you of a security breach at your bank or building society. They then try to get you to move your money to an account controlled by the scammer.
Best practice for cases like these is to simply call your bank or building society on their real contact number and get confirmation about whether this is a valid security concern.
Lately, scammers have been using the coronavirus vaccine to trick people into giving over their money.
There have been plenty of reports of text messages and emails purporting to be from the NHS, asking for payment to book a slot for a vaccine.
One particularly nefarious case saw a scammer inject an elderly woman with a syringe of fake vaccine and then charge her £160.
Scams like these can be dangerous for both your finances and your health, so always make adequate identity checks if someone is claiming to be a healthcare professional. The NHS will never text asking for bank details, so never respond to these messages or click any website links in them.
Stop, challenge, protect – how to prevent scams
While the police and your bank can help you get your money back, it’s vital to prevent scams before they happen.
Look out for the common traits of scams, such as:
- Time pressure
- The promise of huge returns
- Text messages or websites with bad grammar and spelling mistakes
- Fake web addresses that pretend to be real (e.g. added spaces or dashes that change the address, such as nhs-health.co.uk or barclays-bank-money.co.uk).
If you think you may be in a situation where something feels wrong, always use “stop, challenge, and protect” to keep your money safe:
Take a moment to think, especially if the scammer is trying to rush you into acting. If the situation is legitimate, the person you are speaking to will understand why you want to slow down and check that everything is authentic.
If something does feel wrong, ask questions of the person you’re speaking to. Obtain as much information as possible, and maybe even take notes. If the caller or message you’ve received says they’re your bank or building society, call them on a genuine number and ask if what you’ve been told is true.
Check that your accounts are safe and change any passwords that the scammer may have accessed. Report the scam to Action Fraud, the police, or your bank or building society. This will help make sure that no one else falls victim to the scam.
If you’ve been offered a pension or investment opportunity and want to check that it’s genuine, please get in touch with us.
At Digney Grant, we have over 20 years of experience in helping keep your finances safe. Call +44 (0)28 3082 8880 to speak to one of our advisers.