Financial scams have been estimated to cost innocent UK civilians approximately £10 billion a year.
Top financial scams
Although there are very many types of financial scams in the UK today, “goods not received” scams are the most popular today. As the name suggests, such scams are characterised by customers paying for goods or services which they never receive. What’s more interesting is; only a fraction of the people who are scammed this way (approximately 30%) report the incidences. This is according to Natwest statistics. The same statistics also show that most ”goods not received scams” happen online in auctions as well as marketplaces.
Invoice scams are the most expensive scams against businesses in the UK. On average, every UK business which falls prey to invoice scams loses £30,000. The scams occur when businesses receive invoices that appear to originate from trusted partners but are actually fake. The scammers usually communicate new payment arrangements i.e. the business in question should settle the invoice by sending money to a new account which in reality is operated by fraudsters and not the partner. Invoice scams are the 4th most popular types of financial scams in the UK. The second most popular financial scam in the UK is the; Advance fee scam followed by spoof payment request scam. Holiday scams fall fifth place.
How to protect yourself from financial scams
Protecting yourself against “goods not received” scams
To avoid the most common type of financial scam online, you need to be very cautious about where you shop online. First and foremost, you need to shop in reputable online stores only. It’s also advisable to check item descriptions carefully. You should also read the dispute resolution policy of the online store or online marketplace in question carefully before paying. Payment should also be made via recognised official payment services like PayPal which have effective dispute resolution channels and never through direct bank transfers off-site.
Protecting your business against invoice scams
As a business owner, you should never settle an invoice without getting into contact with your trusted business partner first. This should be procedural especially when there are any changes made to your payment arrangements. Since fraudsters have to send you correspondence in invoice scams informing you of a new bank account among other payment changes, you should consider official communication channels only and get in touch with trusted partners to discuss any new changes.
Protecting yourself against advance fee scams
Advance fee scams are scams where you are expected to pay a fee before you take advantage of offers/opportunities. You should never pay to access any offers/benefits or loans such as payday loans. Advance fee scammers are usually after the advance fee which appears small compared to the goods, services, benefits or opportunities you are expected to enjoy. Career opportunity and loan scams are among the most common types of advance fee scams. In career opportunity scams, job seekers are required to pay some money to access great employment/job opportunities. Never pay to access job opportunities or other financial opportunities without assessing the validity of those fees.
Signs of financial scams in texts, calls, emails and websites and how you should protect yourself
Scammers have to get in touch with you to scam you. Here’s how to identify a scammer by their texts, emails or website.
Texts: Scammers love sending suspicious texts. For instance, you may receive a text informing you that your bank account has been blocked and the action you should take going forward i.e. call a certain number. Never text back or call the number on the text. Instead, contact your bank using the official phone number.
Calls: Financial scammers also love cold calling. To avoid cold calling scams, never answer calls from suspicious numbers. If you do, hang-up immediately. Never answer any questions from strangers to avoid giving out sensitive personal information.
Emails: Scammers also love emailing their victims. They pose as reputable website support staff and send emails requiring some action i.e. clicking on a link. If you don’t pay close attention to the emails you receive and open, you are at risk of falling for email scams. Pay attention to spelling mistakes in emails. Also, never click suspicious links, pop-ups or attachments to avoid downloading malware among other harmful software into your computer.
Use social media responsibly: You should also be careful about the information you post online on your social media profiles to avoid being scammed. You should avoid posting any personal information online for the public to see i.e. phone numbers, address, etc. If you have to post such information, make sure you secure your account accordingly. Ideally, you should never post anything that introduces privacy risks.
Install a good antivirus: Most financial scams today happen or are facilitated online over unprotected computers. Having a good antivirus can help you detect and get rid of malicious software used to steal personal data and launch scams.
Report scams: You also need to report scams to protect yourself from scams in the future. Most scammers don’t stop launching scams until they are caught, so it is important to report scams even if you haven’t suffered any loss. If you think you have been scammed or you are about to be scammed in the UK, get in touch with Action Fraud immediately by following this link: http://www.actionfraud.police.uk/report_fraud
Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.