What is a scam?
Scams are fraudulent schemes that dupe people into parting with their personal details and/or cash. They’ve been around for as long as we can remember, but they’re no longer confined to shady door-to-door salesmen or dodgy second-hand car dealers.
Scams come in many different forms, but they are all designed to get hold of your money. They can do this by getting you to reveal your personal details, stealing your information, or even getting you to willingly hand over the cash. The key is knowing how to recognize a scam, and knowing how to protect yourself.
Scammers target people through emails, online banking systems, text messages and online transactions. While fraud is becoming ever more sophisticated, people are still getting caught out by traditional scam letters and phone calls – so you need to be very wary.
Some scams are obvious. Someone emails you to say a distant relative has died, and there’s no one else but you to inherit their £100 million fortune – all you need to do is pay £500 upfront to release the funds. But some scams are a lot less obvious, and a lot more intelligent.
Criminals successfully stole £1.2 billion through fraud and financial scams in the UK in 2018
Types of scam
The tactics used by scammers and fraudsters can vary from someone coming to your front door to an unexpected phone call. The internet and advances in digital communications have opened other ways for scammers to target you and steal information. Chances are, you’ve come across the most common type of scams – the spam email from a Nigerian prince or reporting to be from HMRC or your bank. However, while email scams can be quite easy to spot and avoid, others are much more sophisticated.
Is it a scam?
If it sounds too good to be true, it usually is. This is something you normally find with pension or investment scams, where the fraudster guarantees you huge returns, but tells you it is low risk.
- Personal details, PIN codes and passwords – these are things no legitimate company will ask you for.
- Quick decisions – if you are pushed into making a decision on the spot, be suspicious. Scammers don’t want you to have time to think about it.
- Random competitions – particularly if you don’t remember entering them, should ring alarm bells.
Scams currently common in the UK
There are 1,000s of ways scammers try to catch you out. Common methods include:
- Calls from someone claiming to be from a Government department – or a representative talking about reclaiming bank charges. Calls and/or text messages from HMRC (the UK tax office) are very common
- Vishing – where scammers tell you they’re from your bank and there’s been fraud on your account, asking you to call them back, but instead they wait on the line and then get you to hand over bank details
- Miracle cures or miracle weight-loss pills – are very common and appear on many people’s Facebook pages
- Fake calls from someone pretending to be from the Financial Ombudsman Service – asking for personal financial details. The Ombudsman will never call you out of the blue to ask for information – it’ll only be in touch if you’ve got a case with it already
Tax scam text messages
By far one of the most common types of messaging scam are fake texts and calls from HM Revenue and Customs (HMRC, the UK tax office). Scammers use number spoofing to make your phone display ‘HMRC’ as the sender, instead of a phone number.
The warning in the messages can vary considerably, but some of the reported scams are:
- That you’re owed a tax refund with a link to put in your details to receive it
- There’s a warrant out for your arrest because you owe HMRC money
The links in these messages will usually send you to a website which will harvest your personal information or spread malware which can lead to identity theft and/or theft of your money. HMRC sometimes sends text messages but will never ask for personal or financial information. It also says it will never contact customers who are due a tax refund by text message or by email.
If you get a text message claiming to be from HMRC offering a ‘tax refund’ in exchange for personal or financial details, don’t reply and never open any links in the message.
If you do get a HMRC scam message it, forward it to 60599 (network charges apply) or email phishing@hmrc.gsi.gov.uk and then delete it.
Things HMRC will never ask you to do:
HMRC will never ask for your bank account details, personal information or send you notifications by email for:
- Tax rebates
- Tax refunds
- Personal or payment information
If you do receive an email from HMRC or an email promising a tax rebate, do not respond, do not click on any website links within the email and don’t disclose any personal or payment information. Instead, contact HMRC directly to check whether the email is genuine.
Things Banks will never ask you to do:
- Call or email to ask you for your full PIN number or any online banking passwords
- Send someone to your home to collect cash, bank cards or anything else
- Ask you to email or text personal or banking information
- Send an email with a link to a page which asks you to enter your online banking log-in details
- Ask you to authorize the transfer of funds to a new account or hand over cash
- Call to advise you to buy diamonds, land or other commodities
- Ask you to carry out a test transaction online
- Provide banking services through any mobile apps other than the bank’s official apps
The next step to avoiding scams is to know how to protect yourself. While some of these are good advice in general, many are aimed at keeping you safe online:
- Avoid any unexpected contact – any phone calls, letters, emails or people knocking on your door should be ignored
- Never give out personal information – this can be used to steal your identity and access accounts
- Keep your computers operating system and virus protection software up to date – don’t ignore updates as these can often include patches to protect against new kinds of scams, viruses and ransomware. This goes for mobile devices as well
- Make sure all accounts have a strong password – don’t use the same password for multiple accounts and change them regularly
- If you’re unsure about a financial services company, check the FCA Register of regulated companies – if they’re not on it, don’t have anything to do with them
- Use safe and secure WiFi connections and avoid public WiFi – your standard 3G or 4G connection is often more secure than the one in the coffee shop or restaurant
- Make sure any websites you are using are secure – check to see if the web address starts with HTTPS, not just HTTP
What should you do if you’ve been the victim of a scam?
If you think you’ve been scammed there are three things you need to do:
- Stop sending money straight away. If the payment has been set up as a Direct Debit, get in touch with your bank to stop this immediately
- Report the scam to Action Fraud on 0300 123 2040, use the Action Fraud online reporting tool, or the FCA Scam Smart website
- Beware of follow-up scams. Sometimes after reporting a scam you might get targeted again by a fraudster who says they can get your money back