In its most recent Annual Fraud report, UK Finance found that Brits lost a combined £1.2 billion to scams in 2022. While that figure represented an 8% reduction compared to 2021, it’s still a huge amount. And fraudsters’ tactics continue to evolve.
HMRC recently issued an alert confirming that scammers are using government deadlines to pressurise their victims into handing over money or personal information.
Lloyds Banking Group, meanwhile, report that two-thirds of all online shopping scams now start on Facebook and Instagram. The bank has also issued warnings about the dangers of romance scams, and of handing over personal details online.
With new scams appearing all the time, you must keep on top of the tactics scammers are using and the red flags to look out for.
Here are two recent scams to be aware of now.
1. “Clone firm” scam reimbursement
As consumer education grows, we are all becoming more aware of the different types of scams that fraudsters can turn to. This doesn’t stop criminals, but it does force them to evolve, forever developing new tactics in the hope of catching us out.
One of the latest scams to target Brits is known as a “clone firm” reimbursement scam. Fraudsters clone the identity of a real financial services company – likely by using a fake website containing the scammer’s contact details – and then contact you, claiming to be able to help you recover money lost to a scam.
FTAdviser recently reported on a scam involving an FCA-registered firm called Premier Group Financial Services Ltd but others are likely to follow.
Scammers are clever and the email or text you receive will likely look genuine and the cloned site will too. Check the FCA register to ensure the details on the site match those registered with the FCA and remember that any contact out of the blue is highly likely to be a scam.
2. “Money mule” scams
A recent report in the Guardian exposes the risks posed by “money mule” scams. This type of fraud uses the bank accounts of unwitting victims – usually students, but more recently those in their 50s and 60s – to launder money on behalf of criminals looking to illegally move the proceeds of their illegal activity.
There are three stages to money laundering:
- Placement
- Layering
- Integration
While “placement” and “integration” involve putting money in, and then taking it out of the system, “layering” is the process of moving money around to hide its true origins. It is this part of the process that victims’ bank accounts are used for.
You might be contacted with a “too good to be true” money-making opportunity and be asked to hand over your bank details. You should never do this.
Cash will be moved quickly into and out of your account – possibly after you have completed “training” that helps to make the endeavour appear legitimate – and you will likely be promised cash rewards or gifts. But money laundering is a criminal offence with a maximum sentence of 14 years in jail.
The Guardian report confirms that more than 40% of current account fraud is linked to a money mule scam so be watchful.
Education is key to protecting yourself and your business
There are many red flags to look out for, including:
- Any contact received out of the blue
- Time-sensitive offers designed to rush you into making a bad decision
- Offers that are too good to be true or that offer “guarantees”.
Pension cold-calling has been banned since 2019, but unsolicited contact about any financial opportunity should set alarm bells ringing.
High-risk investment opportunities are highly likely to be unregulated, which means your money won’t be protected. Remember too, that no finance professional would ever rush you into deciding or ask for personal details, so be sure to speak to us before you act on any financial offer.
Bear in mind UK Finance’s Take Five to Stop Fraud campaign, which encourages you to:
- Stop and think about whether a contact you receive is genuine before replying or clicking links.
- Challenge callers and not be afraid to arrange a callback once you have completed your own due diligence.
- Protect yourself by knowing the red flags to look out for and where to turn if you are worried you might be a victim.
These three steps are crucial at home but taking them into your business – and educating staff – is vital too. Cybercrime is on the rise so staying vigilant at all times is key.
Remember to always check the FCA Register to make sure a company is genuine and visit the FCA’s ScamSmart page too.
If you think you have already fallen victim, contact your bank immediately and then speak to Action Fraud to report the incident.
Get in touch
With decades of experience, our Chartered Financial Planners have the expertise to help you plan your retirement your way. If you have any questions, please get in touch and speak to us today.
