Financial scams are a rising problem in the UK, with more than £1.17 billion in financial losses in 2023, according to banking body UK Finance.
UK Finance’s most recent figures suggest over £570 million was stolen in the first half of 2024.
Almost everyone knows a friend or family member who has been a victim – or at least had a brush with – a financial scammer.
Unfortunately everyone is susceptible to scams and fraudsters become increasingly adept at manipulating the internet and communications technology to part us from our cash.
So what can we do to protect ourselves, and our loved ones, from financial scams?
Know the methods
It is important to be aware of some of the most common forms of scams and tactics that fraudsters use to steal, manipulate and deceive in order to obtain our money fraudulently.
As a starting point, UK Finance names the major forms of financial crimes it sees, and how much it cost UK residents in the first half of 2024:
Unauthorised fraud: where a scammer obtains payment method information such as debit or credit card numbers, cheques or access to remote banking to make unauthorised transactions – £358 million.
Authorised Push Payment (APP) Fraud: APP fraud is where the scammer convinces the victim to transfer by bank cash to an account outside of their control fraudulently – £213.7 million.
In terms of retrieving funds, some 98% of stolen money was refunded from unauthorised fraud, thanks to robust rules around financial institutions compensating victims.
APP fraud however saw much lower reimbursement rates of just 59%.
Preventative measures
When it comes to protecting yourself from fraud, one type is much more problematic than the other.
In a sense, there’s not a huge amount we can do to prevent unauthorised fraud, other than to ensure the security of our card details and physical cards.
This type of fraud encompasses remote card purchases, lost and stolen cards, cards lost in the post, counterfeit cards and card ID theft.
APP fraud, although less common, is much more pernicious. This is because more often than not it requires the scammer to effectively convince the victim to make a bank transfer themselves.
To do this they use a number of tactics and have become ever more sophisticated when it comes to tricking people who might often otherwise consider themselves switched on.
These include a massive variety of methods that are unfortunately too long to mention but will typically involve some sort of unsolicited contact over email, phone, social media or other communication methods.
Scams can include fake digital romances, ‘hey mum/hey dad’ text scams, phishing and others.
If you want to look in more detail at some of these types of scams, or are concerned you might be susceptible, the Government’s personal finance information services Money Helper has an excellent in-depth list.
More broadly, the Metropolitan Police have a list of 10 ‘golden rules’ to prevent fraud:
- Be suspicious of all ‘too good to be true’ offers and deals. There are no guaranteed get-rich-quick schemes.
- Don’t agree to offers or deals immediately. Insist on time to get independent or legal advice before making a decision.
- Don’t hand over money or sign anything until you’ve checked someone’s credentials and their company’s.
- Never send money to anyone you don’t know or trust, whether in the UK or abroad, or use methods of payment you’re not comfortable with.
- Never give banking or personal details to anyone you don’t know or trust. This information is valuable so make sure you protect it.
- Always log on to a website directly rather than clicking on links in an email.
- Don’t just rely on glowing testimonials. Find solid, independent evidence of a company’s success.
- Always get independent or legal advice if an offer involves money, time or commitment.
- If you spot a scam or have been scammed, report it and get help.
- Don’t be embarrassed about reporting a scam. Because the scammers are cunning and clever there’s no shame in being deceived. By reporting it, you’ll make it more difficult for them to deceive others.
Falling victim to a scam can have devastating financial consequences. If you’d like to discuss any other protections you can undergo to ensure you’re not affected, don’t hesitate to get in touch to share any concerns.
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