The challenges posed by fraudulent activities have become increasingly apparent in the digital age, with the 2017 figures from the Crime Survey of England revealing that there were 3.4 million incidents of fraud during this 12-month period.
The Annual Fraud Indicator estimated fraud losses in the UK at around £190 billion every year, with the private sector being the hardest hit to the tune of £140 billion.
But what are the most common financial scams in the UK, and how can you look to avoid them as a consumer?
#1. Pension and Investment Scams
This is a popular target by scammers, who often use incentives and the promise of increased returns as a way of stealing their victim’s hard-earned cash.
One of the most common schemes is for criminals to contact you by phone telling you that you can access your pension fund early, which could represent a lucrative investment opportunity if you have a viable lump-sum saved.
Fortunately, it’s easier than ever to identify such scams, with the government having outlawed pension cold calling in January 2019, so if you receive a telephone call of this type you’re almost certainly being targeted by some sort of scam.
Phrases such as ‘free pension review’ or ‘guaranteed returns’ should also raise significant red flags, while unusual or high-risk investments should also send you running for the hills.
#2. Push Scams
There’s a reason why customers are increasingly wary in the modern age, as so-called ‘push scams’ are now widely used to encourage victims to transfer money to complete transactions by way of a supposed appeal from authority.
Research from Santander in June found that 45% of customers would transfer money out of their account if prompted by an individual in authority, with this type of impersonation fraud based on key psychological triggers and accounting for millions of pounds every single year.
Scammers will usually make contact by phone, telling you to transfer money to a safe account due to irregularities or an issue with your existing account (the money subsequently lands in the hands of the fraudsters).
Just remember that a bank will rarely make contact to discuss your account in this manner, while if you’re in any doubt you can simply end the call and make contact via the official number of your bank or building society.
#3. Contactless Card Skimming and Debit Card Fraud
Back in 2015, Which? Magazine carried out an experiment in which they easily acquired contactless card technology and used this to remotely steal key card details from a contactless card.
These details were then used to buy various items, including big ticket purchases such as a £3,000 flat screen TV. This is referred to as skimming, but the practice requires close proximity to a scammer and you can safeguard yourself by keeping your card hidden away in a wallet in your pocket or using Apple or Android Pay.
Distraction theft is also used to steal corporeal debit cards, either at an ATM or a supermarket checkout.
This is why you should remain vigilant at all times when withdrawing cash or buying an item in-store, while you can also use a prepaid debit card to minimise your loss in the event of a theft being completed.