3 scary financial scams to be aware of and how to protect yourself and others

Technology has made it easier than ever for scammers to target victims. And their tactics are growing ever-more sophisticated. Even people who research firms and deem them to be genuine have found themselves duped out of their life’s savings.

One of the most recent scams to make the headlines is “push payment” fraud. This is when victims are tricked into transferring money to a fraudster in the belief they are calling from the victim’s bank or the police.

Last year, scammers managed to steal £479 million from 150,000 victims this way – an increase of 22% on the previous year.

And that’s not all.

In the first quarter of the 2021/2022 financial year, the Financial Ombudsman Service saw a frightening 66% rise in fraud and scam complaints. There have so far been 5,025 cases in 2021. During the same period last year, they received 3,028 cases.

Even if you’re financially savvy, a scammer can catch you at a vulnerable time and persuade you to part with your cash. So, here are a few things to watch out for and advice about how you can protect yourself from letting a scammer get away with your hard-earned money.

3 common financial scams you need to be aware of

More than three cases of fraud are recorded every five minutes, so it’s wise to know what to watch out for.

While there are multiple ways scammers might target your wealth, these are three of the most common financial scams to be aware of.

1. Early pension release – Watch out for scammers using phrases like “pension liberation” or “pension loan”

Pensions are often one of your largest assets, but they are locked away until you reach a certain age. At the moment, most people are allowed to access their pension at age 55 without penalty. In 2028, this will increase to age 57.

You may wish to retire early or be tempted to boost your income by accessing your pension early. But beware of scammers attempting to capitalise on your temptation.

You’re only allowed to access your pension savings before a specific retirement age under exceptional circumstances. For example, if you are diagnosed with a terminal illness, you may be able to withdraw funds from your pension without penalty.

If someone tries to persuade you it’s possible to get money out of your pension early, don’t fall for it. If you succumb, you could face a large tax bill and, worse still, lose all your pension savings.

2. Share, bond, and “boiler room” scams – Watch out for cold-callers offering an opportunity to invest in shares or bonds

Fraudsters operate out of so-called “boiler rooms” to cold-call potential investors.

If you’re unfortunate enough to receive one of these fraudulent cold-calls, you will usually be offered shares or bonds that are worthless, overpriced, or may not exist at all.

Fraudsters will use sophisticated, high-pressure tactics to try to get you to invest.

As well as cold-calling their potential victims, they’ll sometimes use online ads or adverts in newspapers or magazines to encourage potential investors to call them directly.

3. Overseas property and crop scams – watch out if someone offers you a high-return, low-risk investment opportunity

If someone offers you the opportunity to invest in overseas property or crops, they will often encourage you to buy a plot of land, claiming it will be used to build property or for agricultural commodities.

Investment periods are long, often around five years. This means it can take some time before investors realise they have been scammed and their money is long gone.

These fraudsters will also deploy high-pressure tactics to encourage you to make a quick decision.

How to protect your money from financial fraudsters

First, arm yourself with knowledge about how scammers and fraudsters operate. Reading this article is a good start, but it’s also a good idea to share your learning with others.

A five-minute conversation could help prevent fraud

Talk to your friends and family about what they need to look out for. A friendly warning from a trusted friend could be all it takes to help protect someone you know.

Useful anti-fraud checklists

If a stranger calls or emails asking for personal details, ask yourself these questions. It could be all it takes to help you identify a fraudster and protect your money.

5 ways to spot a fraudulent call

1. Were you expecting the phone call, or did it arrive out of the blue?
2. Are they asking you to confirm sensitive details such as your full name, address, or banking details?
3. Are they pressing you for an instant or fast response?
4. Are they asking you for money?
5. Is the caller avoiding having to use the actual name of your bank or utilities company?

5 ways to spot a fraudulent email

1. Is the greeting generic or impersonal?
2. Does the branding on the email match the company or government website?
3. If you’ve received a suspicious email from your bank or other company, has it come from an odd email address?
4. Are you being asked to change your password even though you haven’t received a request to do so?
5. Is the formatting strange or are there spelling mistakes?

If you’re concerned that you may have been the target of fraud, we’re here to provide information and lend support.

Get in touch

If you’ve been approached and are worried it may be a scam, please get in touch. Please email hello@bluewealth.co.uk or call us on 0117 332 0230.