A half-yearly report from UK Finance confirms that fraudsters stole more than half a billion pounds from UK consumers from January to July 2023.
The £580 million taken from scam victims marked a 2% decrease compared with 2022 but the numbers are still huge. UK bank security systems, meanwhile, prevented the loss of a further £651 million.
As numbers remain high, and scammers continue to adapt their tactics, vigilance is key.
Keep reading for a rundown of the red flags to look out for and the best ways to protect yourself and your money. But first, here’s a closer look at the UK Finance report.
Scammers are moving online but pension cold-calling remains a problem despite the ban
Authorised Push Payment (APP) fraud occurs when a scammer purports to be a genuine person or organisation and tricks an unwitting victim into sending money directly to them. Losses from this type of fraud during the reporting period were around £240 million.
UK Finance found that 77% of these cases began online, through emails, fake websites, or adverts on social media.
Just 17% of these cases originated via telecommunication (like telephone or text) but the amounts involved in these types of scams were much higher, accounting for around 45% of total losses, or £108 million. This is despite pension cold-calling being banned since 2019.
Any unsolicited contact you receive about your pension is a scam and you should hang up immediately. But you should be suspicious of any contact you receive out of the blue. It’s highly unlikely that any legitimate investment or finance company would make contact in this way so be on your guard.
Unsolicited contact might come via a telephone call, text, email, or even through a knock at the door and scammers will always try to put you at your ease.
If you are at all suspicious, close the door or hang up. You can forward any suspicious text messages to 7726 and emails to phishing@hmrc.gov.uk but be sure not to click on any links and delete the messages once you forwarded them.
3 more tell-tale signs that you might be communicating with a scammer
1. Time-sensitive offers
Scammers will often tell you that their deal is available for a limited time only or that supplies of their product are running low.
These tactics are designed to pressure you into making a quick decision, without completing your due diligence.
No reputable company will apply pressure in this way and you should always step away and take time to reflect before making big financial decisions.
If a caller demands an immediate decision or refuses to call you back once you’ve had time to think it over, your answer should be “no”.
2. Any mention of “guarantees” or early access to funds
Stock market prices rise and fall daily and there is no such thing as a guaranteed return. But when faced with an expert scammer – applying pressure and trying to tempt you with big promises – it’s not always easy to remain objective.
The finance sector is highly regulated and legitimate companies need to be registered with the FCA. You can check the FCA register to ensure the company you are talking to is authorised.
Also, be wary of any individual or firm that offers to help you access your pension early. This is a scam. The minimum pension age in the UK is 55 (rising to 57 from 2028) and taking your fund early – except on the grounds of ill health – is an unauthorised payment. The HMRC charge for these could be as high as 55%, completely derailing your long-held plans.
Even worse, though, is that the scammer may already have stolen your entire pension fund, leaving you with no pension and a tax charge to pay on top. This is known as “pension liberation” and is a common type of pension scam.
Remember, if a deal seems too good to be true, it probably is.
3. Unusual investment opportunities
Scammers might offer you the chance of a “guaranteed” or “unmissable”, limited-time-only investment opportunity in an unusual area.
This might be overseas property, for example, or the scammer might try to confuse you with jargon and high returns so that the nature of the investment isn’t clear.
Overseas investments are likely to fall outside of FCA jurisdiction, which means the activity could be unregulated and you won’t be covered.
You might try to investigate the company and the offer yourself but be wary of using a website address or phone number the caller gives you. These could be clone sites or a direct line to the scammer’s accomplices.
Always take care to research the company you are dealing with and speak to us before you make any decisions.
Get in touch
Scammers getting hold of your hard-earned money could completely derail your long-term retirement plan so vigilance is key. If you would like to discuss the best way to protect yourself and your family, we can help. Please get in touch via email at enquiries@hda-ifa.co.uk or call 01242 514563.
Please note
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
