It used to be emails from African princes wanting you to help them extract £100 million from a Nigerian bank account. Now it’s a regular phone call from HMRC threatening legal action for unpaid tax or Royal Mail text messages wanting £2.99 to deliver a parcel. Scams are an annoying everyday fact of life.
Whilst many may seem so obvious, some people are still taken in, or the scammers would not keep sending them out. By distributing a huge number of messages, by email, text, or social media, scammers only need to catch a few to make it worth their while.
Some result in obvious theft whilst others may simply be collecting personal and financial information that will be used for future frauds. This is known as “phishing” – the practice of using fraudulent e-mails and copies of legitimate websites to extract financial data from computer users for purposes of identity theft.
All this means we must be alert to such messages and take care even if they sound plausible.
Fraud costs the UK £38 billion a year, according to estimates proved by the National Fraud Authority. Whilst almost half of this relates to tax fraud, it estimates that £4 billion is lost by individuals.
Individual losses can range from a few pounds from a parcel delivery fraud to many thousands due to a sophisticated financial services fraud.
The most frequently reported scams relate to the buying of non-existent goods and services. Items bought on an online auction site and not delivered or a non-existent holiday or property rental.
Which? recently reported on a Facebook post supposedly from Alton Towers offering a free competition to win a holiday. It was a scam but attracted 74,000 likes before they reported it to Facebook who removed the post. The previous year they had spotted a similar post ostensibly from Center Parcs offering a free holiday draw in return for likes. It was not clear what was behind these scams but at a minimum it was collecting data for future contacts or spam ads mailing in the future.
Some of the most frequent scams include:
Romance Fraud
Romance fraud is prevalent with fraudsters using online dating sites to extract would-be partners’ savings. Action Fraud received reports of losses totalling £2.5 million during a six-month period from this type of fraud alone. Don’t part with money to someone you have never met.
Counterfeit Holidays
The growth of online booking has made it easier for crooks to make money from fake holidays. Websites such as Airbnb and Holiday Lettings can be used to offer fake holidays usually at not-to-be missed prices. In the past this was often luxury villas in Greece or Italy but now, with the growth of Staycations, it might even be a caravan in Devon or a cottage in Norfolk.
Pet Scams
The Pandemic has also resulted in an increase in Pet Fraud. Again, Action Fraud estimates losses of almost £3 million from this type of fraud in the last year. The most common scam is deposits being taken for non-existent pets. Others include puppies being imported from abroad often too young and without any vaccinations, sellers using a fake “mum” to suggest a small-scale breeder, fake medical documents, and, when completing a transaction, offering to meet you halfway so you do not see where the animal lived.
Pension Rackets
Pension funds often involve large amounts of money and can be lucrative targets for scammers. They try to persuade pension holders to transfer all or some of their savings to so-called attractive investment opportunities that don’t exist or are not anything like as good as they sound. Most commonly these start with a cold call, but some attract victims through fake websites.
Email Modifications
Another very scary scam involves the falsification of email addresses. A scammer sends their victim an email from an organisation or someone they think they know but the address is slightly altered. There have been a number of examples of homebuyers being sent an email they thought was from their solicitor asking them to transfer deposit money to a specific bank account. But the email was false, and the bank account belonged to the crook.
Some scams are very sophisticated and can involve the setting up of fake websites, frequently replicating genuine organisations. Often used to promote so-called not-to-be missed investment opportunities, they can entrap gullible investors to part with their savings.
Money Mules
One of the ways in which scammers get away with their ill-gotten gains is by using money mules.
Money mules are often recruited by social media or online advertisements offering jobs or money-making opportunities. Young people, particularly students, are targeted.
The process is simple but illegal. Money is deposited into a mule’s bank account with instructions to transfer it to another account, keeping a small amount for themselves.
It is illegal and could result in a criminal conviction and up to 14 years in jail if caught. And the mule is more likely to be caught than the people behind the crime. Last month a Liverpudlian man was jailed for seven months for allowing his bank account to be used to launder £42,000 from a solicitor fraud. He was promised £200 but only got a criminal record.
So what can we do to ensure we don’t become a scammer’s victim?
- Always consider, is an offer too good to be true? If it is, check it out very carefully before proceeding.
- Think twice before acting – look for the tell-tale signs of a scam email or website.
- Double check the domain name. Just one letter different or a different suffix could send you somewhere else. If you are concerned, search for the organisation’s website separately to check its genuine.
- When searching for a website, look out for paid ads. They always appear at the top of the listing. Whilst most may be genuine this is where a fraudster is likely to place a fake site.
- Never pay for anything by bank transfer unless you know the organisation well and are sure the details are correct. Pay by credit card which is traceable and also gives some protection against fraudulent activity. This is particularly relevant for holiday fraud.
6. Look for a padlock next to the domain name. This means that the site is encrypted, and data can’t be intercepted. Most genuine websites are encrypted these days.
7. Be alert to psychological pressures. Scammers can use authority, urgency, emotion, scarcity, and current events to entrap you.
8. Check out online reviews – if you have concerns, look elsewhere on the Internet for comments and negative feedback
9. With financial services, check The Financial Services Register (register.fca.org.uk). It lists all genuine firms, what services they are regulated to provide, and their contact details.
10. Ensure your children are aware of the implications of becoming a money mule