Are you up to speed on the latest and most common scams? Knowing what to watch out for when you’re contacted can stop fraudsters in their tracks.
Scams are schemes to con you out of your money. Fraudsters can contact you by post, phone, email or text – or a scammer may even knock at your door. It could be a scam if:
Financial scams are ways of getting hold of your bank details to steal money from your account. Some financial scams persuade you to invest in bogus deals involving shares or other investments.
Knowing how scammers work can help you to protect yourself against fraud. So read about the latest and most common types of fraud:
This is when scammers sell you flights, accommodation or holidays that don’t exist.
Holiday scams are on the up. People are being scammed out of millions of pounds a year and are often left with nowhere to stay when they arrive in their destination.
One of the biggest scams is on accommodation websites. You search for a villa, apartment or mobile home and find your perfect retreat. It looks great, so you email the owner. But instead of paying through the holiday accommodation website, they ask you to pay straight into their account by direct bank transfer – often enticing you with a discount. But the advert and photos are fake.
You can also be ripped off by bogus travel websites, selling discount package holidays. The websites can look like the real deal, some even claim to have ATOL protection. They might post you a glossy brochure, too. But you only realise it’s a con when your flight documents fail to materialise, or you get to the airport and can’t check in with your booking information. And by then, the website has closed down.
Thinking about booking a flight, accommodation or a package holiday? Make sure you do your homework before you pack your bags.
Unfortunately, with this type of fraud, you probably won’t realise you’ve been scammed until you arrive at the airport or in your holiday destination.
Brenda booked and paid for a 5-night trip to Norway with an online tour operator, specialising in Scandinavian adventures. The company had a professional-looking website and brochures, and Brenda even spoke to a travel specialist on the phone to plan the itinerary and pay for the trip. When she didn’t receive any travel documents, she tried to contact the tour operator, but discovered it didn’t exist.
Usama found an apartment in Florida on a well-known holiday accommodation website. After communicating with the owner via the website’s email messaging system, Usama was offered a 10% discount if he paid by bank transfer. When he arrived in Florida, nobody met Usama and his family, as arranged. The apartment did exist, but the fraudster had taken control of the real owner’s messaging address and received the full payment, without the owner’s knowledge.
Scammers will usually call you, claiming they're from a respectable pension review company, stockbroker or investment consultancy. The fraudster will then try to sell you an investment with guaranteed or high returns.
The person you speak to will probably sound very knowledgeable and give you information you’d think only a genuine company would know. They might also have information about you, including details about other investments you’ve made.
The scammer will often try to call you a number of times to build a relationship with you and gain your trust. Then if you do invest, they’ll probably try and get you to part with more of your money in ‘another great opportunity’.
Have you been contacted about a ‘too-good-to-miss investment’ with a guaranteed return?
The scammer could be trying to get you to invest your savings in anything from rare metals and wine, to shares and overseas property developments. Many developing markets are still unregulated, so investment markets are an easy target for fraudsters.
If you’re over 55, you can access your pension savings and scammers know you can choose how to invest it. Over £1 billion is lost every year in the UK, due to this type of fraud.
Patricia was called from a company offering an investment in Champagne. The returns were guaranteed and the investment was offered below the market value. After her initial interest, Patricia was directed to a professional-looking website and sent a glossy brochure. She decided to invest £10,000, and was given official documents as proof of her investment. But when she tried to sell her investment, she discovered the company didn’t exist.
Martin’s friend recommended a financial advisor, who was investing in a hotel complex in Tenerife, on behalf of clients. A 7% return was guaranteed for a 12-month period. After a series of friendly emails and phone calls, Martin trusted the knowledgeable advisor and invested 70% of his pension fund. When his investment was due to pay out and he didn’t hear anything, Martin tried to contact the financial advisor, but he couldn’t be traced.
Joy lost £8,000 of her pension savings because of a scam. She then had a call from a company claiming to specialise in recovering money from this type of fraud for a one-off fee. The caller was very confident that they’d be able to recover her £8,000, so Joy agreed. But after telling the caller some of her personal details and paying the fee, she never heard anything and the telephone number they gave her had been disconnected.
