Friday the 13th

Friday the 13th is generally thought of as as one of the unluckiest days of the year, and it’s back today. Many people are superstitious about Friday the 13th and psychologists have even come up with a word for it – paraskavedekatriaphobia, or fear of Friday the 13th.  On this day, people avoid taking risks and are ultra vigilant about where they go and what they do. If most people were this careful with their day-to-day finances, the scale of financial fraud would be greatly reduced.

Financial fraud is on the rise. Even the most savvy among us can fall foul. The problem is that scams look and sound legitimate, which is why people are often easily tricked. The simple fact is that conmen are getting more deceitful and ever more successful. Financial crime costs the UK an eye watering £52 billion, according to the Economic Crime Directorate at the City London Police. And this figure isn’t all of it — apparently 88% of all cybercrime goes unreported. Here are a few common scams and how to protect yourself against falling foul.

Boiler-room scams

A boiler-room is an illegal share-dealing operation. A professional-sounding stockbroker will call out of the blue and offer an investment opportunity with returns at around 40%. The caller is likely to tell you that this is rare opportunity you ‘don’t want to miss’ and encourage you to get in early. Fraudsters aim to make their business seem legitimate, so they will often use technical jargon, impressive job titles and mock websites to appear credible. Once they get their victim to transfer money, it is never seen again. Often sums handed over are in excess of £50,000. If it sounds to good to be true, there’s usually a catch.

Pensions liberation

Fraudsters are offering bogus investment opportunities to the over 55s in the hope of hijacking their pension savings. Now that people have direct access to their pension funds, opportunistic criminals are increasingly trying to convince them to move their cash into different schemes — that do not exist or are designed to wipe out your cash with bogus investments. They can approach you by post, email or telephone and they often have very professional-looking websites and literature. You stand to lose all of your retirement fund should you be hoodwinked.  What is worse is that you may be liable to pay back HMRC if the transfer has broken any tax rule… and the taxman is unforgiving.

Phishing/smishing

Fraudsters pose as someone from your bank or building society to extract your bank details. Typically you receive an email or text asking you to click a link and verify log on, account and password information. The communication received is from a fraudster who will be able to read what you type in, should you fall for their trick.  This is then used to raid your current and savings accounts. If you lose money this way, you won’t get it back. Never click on links sent from your bank and never enter your password or other personal information in full.

Property fraud

This online con takes place when a computer hacker monitors emails sent by a solicitor and a homebuyer. When a bank transfer is about to be made, typically for a deposit, they email the homebuyer pretending to be the solicitor, telling them that the details of the law firm’s bank account have changed. The unsuspecting homebuyer sends their cash to the new account, where it is withdrawn by the fraudsters. The Solicitors Regulation Authority watchdog has warned that this scam is on the increase.

How to steer clear of criminals:

1. Deal only with companies that are authorised by the Financial Conduct Authority (FCA). You can check by calling 0800 111 6768 or online at fca.org.uk/register.
2. Hang up the telephone if you are cold-called about a supposed investment opportunity. The government outlined plans at the end of 2016 to ban cold calls — but only those specifically targeting your pension savings.
3. Never assume investments are genuine just because the company offering them is based in a well-known location or because the salesperson sounds honest.
4. If you’re offered a ‘must-have’ investment or a free pension ‘review’ out of the blue, be wary.
5. Always remember that if an investment looks too good to be true, it usually is. Be wary of unusual investments, such as buying land overseas.
6. Double check an opportunity using the FCA’s scam detector at scamsmart.fca.org.uk/warninglist.
7. Never click on links in emails or texts that are purported to be from your bank or financial services provider.

Get financially savvy at compareandinvest.co.uk.

Article is accurate at date of writing.