As financial scams become more commonplace, especially online, we’re here to explain 10 of the most frequently used by scammers and how you can avoid falling for them
It can sometimes feel like financial scams are inescapable. With criminals becoming increasingly sophisticated and moving their fraudulent schemes online rather than attempting to convince you in person, it’s all too easy to accidentally click on a phishing link or get fooled by a convincing plea for help from a family member.
If you’re worried about falling victim to a financial scam, you’re not alone. A recent survey by NatWest found that 60% of Brits worry about losing money to an online scammer. 7 in 10 of us have been targeted by scammers in the last 12 months, dealing with an average of three scam attempts each week. Unfortunately, 13% have been unlucky enough to lose money to a fraudster.
Don’t worry; we’re here to help. Read on to learn more about the 10 most common financial scams and how to avoid them:
1. Phishing scams
Phishing is one of the most well-known types of finance scam. Fraudsters will create and send emails or messages that look like they’re coming from legitimate organisations to try and trick you into clicking a link. Once they have you on the hook, they’ll try to reel you in by asking you to provide personal or financial information.
2. Refund scams
Refund scams usually arrives in messages that claim to be from a retailer you buy from frequently. You might receive a text or an email telling you that you’re due a refund (even if you’ve not bought anything recently) but, the catch is, you’ll need to share your bank details to receive it.
3. Trusted organisation scams
This type of financial scam works similarly to refund scams as the criminals involved will impersonate a company you know well. However, instead of a retailer, they’ll pretend to be a trusted organisation like HMRC, the water company or your energy provider. Typically, they’ll falsely inform you that there’s something wrong with your account or you’ve been issued with a fine. The aim is to make you panic and click a link or share financial details before double-checking whether the claims are true or not.
4. Friend or family scams
One of the more insidious types of financial scam is when criminals impersonate your friends or family members. This has become known as the “Hey Mum” scam as that’s how the fraudulent WhatsApp messages sent often start. These messages will usually come from a loved one asking you to send money urgently; they might say that they’re stuck somewhere abroad without any money or that they can’t afford to pay a bill. However, the bank details they share will belong to the scammer.
5. Purchase scams
A purchase scam is one where criminals pretend to have something to sell. They might claim to have a sought-after game console, sold-out concert tickets, or designer clothing, for example. In some cases, once you’ve paid for the goods (they’ll almost always ask you to do this before they send your item), you will be sent something, but it might be fake or faulty. With most purchase scams though, you won’t receive anything at all.
6. Parcel delivery scams
Parcel delivery scams started becoming more popular in the pandemic as the number of people shopping online rapidly increased. With these scams, you’ll usually receive a text or email telling you that you’ve missed a parcel delivery and you now need to pay a small fee to rearrange (and enter your bank details, of course!)
7. Investment scams
Investment scams have been around for centuries, and they have always worked in roughly the same way. You’ll be invited to invest in an opportunity with returns that sound too good to be true. Unfortunately, they usually are. These investments often turn out to be non-existent or a pyramid scheme.
8. Safe Account scams
Another type of finance scam that has become more common in recent years is the safe account scam. Scammers are taking advantage of the fact that more people are using online banking and, ironically, are more aware of online scams. Criminals will impersonate your bank or the police and tell you that they’re investigating fraudulent activity on your account. To stay safe, they’ll encourage you to move your money into another account, but once you do that, your money can disappear.
9. Lottery or Prize scams
Everyone loves to win, but false lottery and prize scams can leave you feeling like the loser. You’ll usually receive a message out-of-the-blue letting you know that you’ve won a prize on the lottery or in a competition, and you need to send your personal or financial details to claim your winnings.
10. Befriending or Dating App scams
One of the best things to come out of the Internet is the ability to make connections, but scammers can take advantage of this to steal your money. They might add you as a friend on social media using a fake account or match with you on a dating app. This type of scam will typically be a slow burn; the scammer will take time to build a relationship with you through online messaging and phone calls until you start to trust them. They will then take advantage of that trust to ask you for money.
How to avoid financial scams
To reduce your chances of falling victim to a financial scam, follow our five top tips:
- Take your time and check the details
Never feel pressured to act quickly, even if the message you receive seems urgent. Legitimate companies will understand that you need to check the validity of their communications before taking action. Slow down and check all the details, especially the email address or phone number. Keep in mind that some scammers can clone official phone numbers, so consider hanging up and calling the number listed on the bank or company’s website from a different device to find out whether you’re being scammed or not.
- If it looks too good to be true, it probably is
While we’d all love to receive a huge lottery win out of nowhere or get involved in an investment that will change our lives, the reality is that those incredible offers probably don’t exist. If you’ve been given the chance to buy tickets to a concert that sold out months ago or buy a designer handbag for less than half price, it’s usually better to miss out and stay safe rather than sorry.
- Be cautious with unknown senders
If you’ve received an email or text message from someone you’ve never met before, it’s best practice not to respond or click any of the links provided. If they’re claiming to be from a company you deal with regularly, there’s no harm in emailing your usual contact or the official email address to double-check they are who they say they are. If in doubt, delete.
- Be honest with your bank
Your bank will have certain security processes in place to help protect you from financial scams. These include never asking you for your pin, password, or passcode over email or text. They will also usually ask questions when you’re making a balance transfer such as whether you trust the account holder, why you’re making the payment, and how you received the account details. Be honest in your answers so the bank can step in if they think you might be being scammed.
- Share information with your friends and family
If you hear about a scam that’s doing the rounds, consider sharing the details with the people close to you to give them a heads up and ask them to do the same for you. It’s also well worth letting your friends and family know what’s going on in your life so they won’t be taken in by scammers. If a criminal is claiming to be you and sending your Mum a WhatsApp from holiday but she knows you’re working from your back bedroom at home, they can be reasonably certain they’re speaking to a scammer, not you.
Looking for support with your finances? Our team of trusted experts is here to help. Give us a call on 0161 8260 585 or send a message here
