5 financial scams to be aware of, and effective tips to protect your money from criminals
24/08/2022Scams are one of the most present dangers to your money.
Research by insurance provider Canada Life shows that this is no small problem, with nearly 30 million UK adults affected by scams in the 12 months to June 2022. In real terms, figures from the Times Money Mentor show that UK savers lost £2.5 billion to scams in 2021.
Criminals are becoming ever more creative and innovative with the ways they try to steal your money. So, make sure you familiarise yourself with these five financial scams to help you avoid becoming a victim, and read a few simple but effective tips to securing your wealth.
1. Pension scams
Whether it’s a guarantee of returns if you move your funds elsewhere or a promise to help you access them early, pension scams are sadly commonplace in the UK.
Indeed, statistics from the Times Money Mentor show that £78 million was lost to pension scams in 2020.
Your pension is likely to be an important part of how you provide yourself with income in retirement. As a result, it’s important to be aware of pension scams, allowing you to safeguard your funds from criminals so you can have the kind of lifestyle you want in future.
Cold-calling pensioners has actually been illegal since 2019, with firms that break the rules facing fines of up to £500,000.
So, if anyone cold-calls you about your pension, you can be confident that the opportunity is not real as this is actually against the law.
It may be sensible to call us at Douglas White to discuss any offers made to you before you act. We’ll be able to verify whether they are legitimate or not.
2. Impersonation scams
Impersonation scams involve a scammer pretending to be someone they’re not in an attempt to gain access to your money.
These scams can take many forms, including impersonating your:
- Bank, perhaps saying your account has been accessed and that you need to transfer your money elsewhere
- Children, with many scammers contacting parents by text or WhatsApp, saying they’re in trouble and need money instantly
- Solicitor, saying that they’re ready for a bank transfer from you for a legal process such as buying a home.
Scammers are always innovating and finding other ways to impersonate legitimate people. Indeed, a recently reported scam by consumer group Which? has involved scammers phoning up people they have already targeted and pretending to be their bank’s fraud team, offering to secure their accounts.
This has seen people become “double victims”, compounding the damaging impact that a scam can have.
Always verify the identity of whoever you’re speaking to before you send money anywhere.
3. Phishing scams
Phishing is a type of online scam where criminals try to gain access to your personal details, perhaps using fake websites or email addresses to convince you that you’re dealing with a legitimate entity.
For example, an email claiming to be from Google might have an email address of “update@go-ogle.com” or similar, purporting to be real when a scammer is actually on the other end.
To avoid these scams, it can help to learn the common signs of phishing. This might include poor spelling and grammar in emails, website and email addresses with additional punctuation, and suspicious links or attachments.
Avoid clicking on links or opening emails that seem strange, and consider asking for help from a friend or family member if you’re unsure whether something is real or not.
If you do think someone legitimate is trying to contact you, call their official customer services so you can be confident in who you’re speaking to.
4. Energy price cap fraud
With energy prices set to rise this winter, a commonly reported scam in the current climate is “energy price cap fraud”.
This might involve emails and calls from scammers pretending to be your energy provider, or from a different company entirely claiming they can help you to reduce your bills.
Once they have your payment details from this, they may then attempt to access your money and move or spend it.
Be aware of any unexpected contact from an energy provider saying that they can help you pay less this year, as it may well be fraudulent.
5. Push-payment fraud
Push-payment fraud involves scammers using the threat of time pressure to force you into making a snapshot decision before you’ve fully been able to think it through.
Indeed, many of the other scams on this list may involve an element of push-payment fraud, creating an artificial time limit to make you feel like you need to act.
Generally, financial opportunities that have a time limit are unlikely to be real. Try not to act rashly in the face of this pressure.
How to safely avoid scams
With so many scams out there, it’s important to be able to protect your money as best as possible.
One solution to this can be to use the “stop, challenge, protect” system from Take Five, a scam awareness group.
Whether it’s a call or an email, remember to first stop before you take action. Ask yourself whether anything about the approach feels strange. For example, does your bank usually call you out of the blue to tell you to move money into another account? Take a second to yourself and see if something feels wrong.
Next, challenge the person you’re dealing with. Ask them for proof of identification if you’re unsure whether they are legitimately who they say they are. It might be worth hanging up the phone and calling back on a number you know if you’re unsure.
Finally, if you think you may have fallen victim to a scam, remember to protect. Change your passwords on accounts, and also consider speaking to your financial providers to make sure your money is secure.
Work with us
If you’d like to find out more about how we work to protect your money, please do get in touch with us at Douglas White.
Similarly, if you know of anyone who might benefit from working with us and would be happy to receive a call, please do pass on their details and we’d be delighted to help.
Email info@douglaswhiteltd.com or call 0151 345 6828 to speak to us today.
Please note
A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.
This article is for information only. Please do not act solely based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
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