How to keep yourself safe from coronavirus scams – and other types of financial fraud

In the past twelve months, unscrupulous scammers have taken advantage of the fear and uncertainty caused by coronavirus.

In early 2020, before the extent of the pandemic was fully known – and with people not yet on their guard – Action Fraud reported that UK consumers lost £800,000 through fraudulent activity. That figure is for February only.

While pension and investment scams have continued, ever-adaptable scammers have found new ways to exploit the virus. From track-and-trace cons to doorstep vaccinations, over one-third (36%) of UK adults say they have received at least one approach connected to potential coronavirus scams in the last twelve months.

You might think you are alert to the dangers but as scammers use ever more elaborate means to hide their activity, here are some things worth remembering.

Coronavirus scams

Phishing and smishing

Sending a fraudulent email that purports to be from a trusted body is known as phishing. Smishing refers to the same practice but using a text message.

You might receive a telephone call, email, or text purporting to be from the government, HMRC, the NHS, your local surgery, or even the World Health Organisation.

Both the UK government and the NHS have sent out text messages during the crisis. Scammers may use these as templates to make their messages appear genuine. Scam messages received so far have included promises of government payouts and HMRC tax rebates, as well as imposed non-existent fines for the breaking of lockdown.

Check any message you receive carefully. If it contains a link, does the URL match the organisation claiming to have sent it? If you receive an email, check the full email address against the company’s website. Is it a match?

If you have any doubts, either delete the message or forward it to the National Cyber Security Centre (NCSC). Emails can be forwarded to and text messages to 7726.

Vaccination scams

As the vaccination rollout began across the UK, vaccination scams appeared. Your local surgery will contact you when you are due to receive a vaccination so be suspicious of any other contact.

A recent smishing scam, supposedly from the NHS, confirmed that recipients were eligible for a vaccine. A link took the recipient to a fake NHS website that asked for personal information and bank details.

Be aware that the scam may appear as though it is from your surgery or GP. As with all communication you receive, if you are at all suspicious, avoid all links and don’t reply to messages.

Find the number of your surgery and ring them directly to confirm if they have contacted you. Your surgery won’t ask for confidential information or bank details. Remember too that the vaccine is free.

Although door-to-door testing was conducted last month to look for cases of the South African variant of the virus, vaccinations are not being given door to door. Do not accept a vaccine or let anyone into your home if you are at all suspicious.

Romance scams

Scammers aren’t only preying on our health fears. Lockdown loneliness has led to a rise in online romance scams.

UK Finance revealed recently that bank transfer romance fraud increased by 20% between January and November 2020 compared to the previous year, amounting to a loss to victims of over £18 million.

As well as bank transfer fraud, other victims have sent money, expensive gifts and in some cases given the fraudster access to their bank account or credit cards. Action Fraud reports total losses of over £68 million.

However well you think you know someone you have met via the internet, take a moment to stop and think before parting with money or information that could put you at risk of fraud.

Pension scams

Pension cold-calling

Pension cold-calling was banned in 2019 but that hasn’t stopped scammers trying to part retirees from their hard-earned pension funds.

While the ban hasn’t stopped cold-callers, it does make scammers easier to spot. If you receive an unsolicited approach about your pension it is highly likely to be a scam.

Look out for red flags, which include:

  • Any cold-call
  • Callers who claim they can “release” or “unlock” your pension before the age of 55
  • Any mention of “free pension reviews”
  • Time-limited offers, designed to rush you into making an unwise decision
  • High-risk or unusual investments, especially if overseas, where UK protections might not apply.

Be aware that taking a pension before the age of 55 is an unauthorised payment. It could result in a 55% tax charge from HMRC on top of any fees you have inadvertently paid to the scammers.

Pension transfers

If you receive a cold-call about a potential pension transfer you should be immediately suspicious. There are other checks you can make too.

Take the details for the company that contacts you and check the FCA register to make sure they are authorised. If they are, use the same site to check the company’s permissions. Are they authorised to complete the specific type of transaction they are offering to do for you?

Important contact information

If you believe you have fallen victim to fraud, you can report the crime at www.actionfraud.police.uk or by calling 0300 123 2040.

Get in touch

Please get in touch if you’d like to discuss any aspect of your long-term financial plans including accessing your pension in a way that aligns with HMRC rules.

Dominic

About the Author

Dom is a qualified and experienced Chartered Financial Planner (CII) and Chartered Wealth Manager CFP (CISI) and a Registered Life Planner (Kinder Institute) with over 30 years experience. His work primarily focuses on retirement income planning, helping clients to maintain financial dignity and independence in retirement. Read more from Dominic...
This article is distributed for educational purposes and should not be considered investment advice or an offer of any product for sale. This article contains the opinions of the author but not necessarily the Firm and does not represent a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed. Past performance is not indicative of future results and no representation is made that the stated results will be replicated.
This is my first venture into any kind of personal finance. Your candour and patience with me are very much appreciated. A.S. (London)

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