Eight fi­nan­cial scams and the warn­ing signs to look out for Scams and the to look out for

Any­one can fall prey to a fraud­ster – so learn­ing more about the tricks they use is a key line of de­fence, writes Vicky Shaw

Western Mail - - BUSINESS WALES -

Could you spot the tricks scam­mers use? It may be harder than you think, as frauds be­come in­creas­ingly so­phis­ti­cated.

Con­sumers lost £92.9m to scams – where they were tricked into trans­fer­ring money di­rectly to a fraud­ster – in the first half of 2018 alone. And adding in­sult to in­jury, peo­ple who have been tricked in this way may sadly never see their money again.

A vol­un­tary code for banks to fol­low has just been pro­posed, which could give peo­ple more help in get­ting their money back. How­ever, vic­tims may still find them­selves out of pocket – so it’s al­ways best, if at all pos­si­ble, to avoid fall­ing for a fraud in the first place.

Na­tion­wide Build­ing So­ci­ety re­cently found that three in 10 (30%) peo­ple would be will­ing to trans­fer their own money into an­other ac­count “to keep it safe” if asked by some­one they thought was from the po­lice – even though the po­lice or a bank would never ask any­one to do this.

Stu­art Skin­ner, di­rec­tor of fraud at Na­tion­wide, whose branches are run­ning fraud aware­ness events, says: “The key to thwart­ing the scam artists and fraud­sters is ed­u­ca­tion. We’d urge peo­ple to learn as much as they can about the tricks that scam­mers use.”

Here are some of the warn­ing signs to spot, high­lighted by trade as­so­ci­a­tion UK Fi­nance...

1. PUR­CHASE SCAM

The vic­tim pays up-front for goods or ser­vices that are never re­ceived. These scams of­ten hap­pen on­line, such as when some­one uses an auc­tion web­site or so­cial me­dia. A warn­ing sign could be if you spot some­thing of high value, such as a car, phone or com­puter, ad­ver­tised at a low price. Fake hol­i­day rentals and con­cert tick­ets may also be ad­ver­tised on­line.

Vic­tims may be per­suaded by the fraud­ster to pay for the goods via direct bank trans­fer, in­stead of us­ing web­sites’ se­cure pay­ment op­tions.

2. AD­VANCE FEE SCAM

With this scam, vic­tims may be tricked into part­ing with their money as a “fee” af­ter be­ing promised a larger re­ward.

Crim­i­nals may claim they have won an over­seas lot­tery or that gold or jew­ellery is be­ing held at cus­toms – and a fee must be paid to re­lease nonex­is­tent money or goods.

3. IN­VEST­MENT SCAM

Peo­ple are per­suaded to move their money into a fic­ti­tious fund or to pay for a fake in­vest­ment. The crim­i­nal usu­ally of­fers high re­turns to en­tice them.

These scams in­clude in­vest­ment in items such as gold, prop­erty, car­bon cred­its, land banks and wine.

4. RO­MANCE SCAM

The vic­tim is con­vinced to make a pay­ment to a per­son they have met, of­ten on­line through so­cial me­dia or dat­ing web­sites, and with whom they be­lieve they are in a re­la­tion­ship.

The “re­la­tion­ship” is of­ten de­vel­oped over a long pe­riod and the per­son is con­vinced to make mul­ti­ple, gen­er­ally smaller, pay­ments to the crim­i­nal.

5. IN­VOICE AND MAN­DATE SCAM

Scam­mers step into the mid­dle of peo­ple’s le­git­i­mate trans­ac­tions to

swipe money that was in­tended for some­one else. Some­one could be pay­ing a so­lic­i­tor or a builder, for ex­am­ple, but the crim­i­nal in­ter­venes and con­vinces the vic­tim to re­di­rect the pay­ment into their ac­count in­stead.

The crim­i­nal may per­suade their vic­tim that the bank de­tails of the per­son they in­tended to pay have changed. Busi­nesses can also be tricked by this scam, when try­ing to pay a sup­plier.

6. IM­PER­SON­ATION SCAM

Some­one pre­tends to be from the po­lice or the vic­tim’s bank, to con­vince them to make a pay­ment. Of­ten, they will claim there has been a fraud on the vic­tim’s ac­count and they need to trans­fer the money to a “safe ac­count” to pro­tect their funds. How­ever, the crim­i­nal ac­tu­ally con­trols the re­cip­i­ent ac­count.

Crim­i­nals may pose as the po­lice and ask the in­di­vid­ual to take part in an un­der­cover op­er­a­tion to in­ves­ti­gate “fraud­u­lent” ac­tiv­ity.

7. PRE­TEND­ING TO BE FROM A LE­GIT­I­MATE COM­PANY

Fraud­sters pose as or­gan­i­sa­tions such as util­ity com­pa­nies, com­mu­ni­ca­tions ser­vice providers or gov­ern­ment de­part­ments, and claim that the vic­tim must to set­tle a fic­ti­tious fine or to re­turn an er­ro­neous re­fund.

The scams can of­ten in­volve the crim­i­nal re­quest­ing re­mote ac­cess to the vic­tim’s com­puter.

8. CEO FRAUD

This mostly af­fects busi­nesses. Crim­i­nals may ac­cess a com­pany’s email sys­tem or use spoof­ing soft­ware to email a mem­ber of the fi­nance team, with what ap­pears to be a le­git­i­mate email from the chief ex­ec­u­tive with a re­quest to change pay­ment de­tails or make an ur­gent pay­ment to a new ac­count.

Think­stock/PA

> Can you spot the warn­ing signs of a scam­mer?

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