The last thing you’ll want to happen to your hard-earned funds is to have them swindled by an unscrupulous fraudster or scammer. Yet, it is a very real problem that people have faced for more than 2,000 years.
History is littered with fraudulent activity and “get rich quick” scams, from the “snake oil salesmen of 19th century America to the Nigerian princes that cropped up during the early days of email communication.
According to FTAdviser, UK savers lost £17 billion to scams in the year leading up to August 2023, as new and persuasive scams continue to arise – taking advantage of trusting individuals.
It is important to stay informed about common scams in order to protect your wealth. Read on to discover four convincing scams to be aware of this year.
1. Fake appeals for help
The past few years have seen a wide range of humanitarian crises from the war in Ukraine to climate change-fuelled ecological disasters.
According to World Population Review, the UK regularly features in the top 10 most charitable nations in the world. Social media has made it easier than ever before to promote an appeal for aid or to inform people of an important charitable cause.
However, it has also led to an onrush of fake appeals for help from scammers.
Some opt to send you directly to a fake donation page for their cause before banking your funds. Others use the public’s sense of decency to help them spread their scam further by encouraging you to share their post.
It is important you review anything shared on social media with a degree of caution and don’t click on any suspicious links or unwittingly share your personal details.
2. HMRC overdue tax scam
You may receive an email or text urgently requesting you settle an overdue HMRC tax bill. It may read something like “HMRC Tax Payment Overdue. Please send a balance of £500 to this PayPal account within 48 hours to avoid a warrant being issued for your arrest or call this number.”
This is a scam.
HMRC will never direct you to a third-party site to pay any outstanding liabilities, yet this a common scam that many Brits unfortunately fall victim to.
HMRC details a list of HMRC-related scams that people should be aware of on the government website and provides contact information if you fall victim to a scam or are suspicious of a message you’ve received.
3. Pension scams
Pension scams are an incredibly common form of fraud and show no signs of abating in the near future.
Scammers might get in touch with you about your pension through email or, even though it is illegal, by cold-calling. They will then try to convince you to part with your hard-earned retirement savings.
The Times reports that since Pension Freedoms legislation was introduced in 2015 – allowing you to withdraw from your pension once you reach the age of 55 – pension fraud cases have significantly increased. In 2022, the Financial Conduct Authority (FCA) saw a 24% surge in pension fraud-related cases.
Fraudsters can be persuasive and may encourage you to cash out your pension early to invest in a scam. They may claim they can help you withdraw funds before you reach pension age without facing any additional tax liability.
However, to activate this “loophole”, they will likely request a fee from you for their services.
Ultimately, you could not only lose your valuable pension savings to fraud but also face being left with a sizeable tax bill on your withdrawal.
4. Ghost brokers
The “ghost brokers” scam refers to scammers who will get in touch to sell invalid insurance policies at ultra-low prices.
They typically target drivers and offer car insurance policies accompanied with fake documents or occasionally take out a real policy but falsify the driver’s details to bring down the respective premiums.
The scam is so effective as most victims don’t realise they’ve been target by a ghost broker until they need to make a claim on their insurance policy.
Ben Fletcher, director of the Insurance Fraud Bureau (IFB) said: “The cost of living crisis means it’s never been more important for people to safeguard their personal finances against fraud.”
Ghost brokers tend to target younger victims. So, if your children or grandchildren are looking to take out a policy, it could be beneficial to guide them through the process and make sure they go directly to a reputable provider.
Read more: What can Del Boy teach you about avoiding scams and “too good to be true” investments?
It’s important that you take steps to protect yourself from scammers
Scammers can be convincing, but patience and due diligence when faced with a pressing decision or a “too good to be true” opportunity could help you uncover fraud before you fall victim to it.
You might want to consider steps, such as:
- Avoiding any suspicious texts, emails, or links
- Taking the time to investigate any investment opportunities thoroughly
- Ensuring you never transfer any funds without verifying the recipient first
- Protecting your personal information and passwords.
If the worst happens and you fall victim to a scam or fraud, you should reach out to your bank and the relevant authorities straight away.
They can help you cancel your existing cards, put additional security measures in place, and start the process of trying to retrieve your funds.
Protections for victims of scams are increasing with the Guardian reporting that new measures that require banks to reimburse victims of banking fraud are to come into effect in the UK in 2024.
If you believe you might have been a victim of fraud, report the issue to Action Fraud by calling 0300 123 2040.
Get in touch
If you have any concerns about a potential investment opportunity or a request for funds, it could be worth seeking out a trusted second opinion.
At Grey Parrot, we are here to guide you through any major financial decisions and help you ensure you stay on track towards your long-term goals.
If you want to discuss a financial opportunity you are unsure about, please get in touch by email at info@grey-parrot.co.uk or call us on 02039 871782.
Please note
This article is no substitute for financial advice and should not be treated as such. To determine the best course of action for your individual circumstances, please contact us.
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