A beginner’s guide to scams

This is a great article I found on the Money Advice Service website (http://www.moneyadviceservice.org.uk/) worth a read!

Knowing about the common scams that fraudsters are trying to use to steal your money can stop you being conned. Read these handy pointers to help you spot a scam.

How to spot a scam

There are some general signs that should set alarm bells ringing wherever you see them. Be very suspicious if:

  • something sounds too good to be true – like free stuff or quick, easy money
  • you’re asked to give out personal or bank account information
  • you aren’t given long to make a decision or you feel pressured into making one immediately
  • you’re contacted unexpectedly by a company or person you have never heard of – this can be by post, email, phone, text or on the doorstep
  • you’re asked to pay anything up-front
  • the only contact details are a mobile phone number and a PO box address

Common scams and what to watch out for

Phishing

Phishing is where someone tries to con you into revealing personal information like your bank account details. A common trick is to send you a fake email pretending to be from your bank or another organisation or company you trust like HM Revenue & Customs or PayPal, asking you to visit a website and log in with your account details. The site looks just like your bank’s website, but is really a fake site set up by criminals to get your details.

Email is the most common way of doing this, but you might be targeted by text message or by phone. If you’re suspicious, ask to call them back and see if the number matches your bank’s real phone number. Make sure you get a dial tone before you call, in case the scammer has stayed on the line.

More information about phishing on the Action Fraud website

Pharming

This is when hackers re-direct the traffic from a genuine website to another, such as a fake e-commerce or banking site. This is a very sneaky kind of attack as although you’ve entered the correct information to the right site, you’re still sent to a fake one to try to get your personal information.

Find out about pharming from Norton Security

Advance-fee fraud

This is also known as the ‘419 fraud’ or ‘Nigerian bank scam’. You’ll receive emails from people claiming to be ex-ministers or royalty from other nations, often in Africa, asking if they can use your bank account to deposit a large sum of money in order to get it out of the country. They will normally offer to pay you a fee.

They’ll ask for your bank details and may also ask you to send money to cover legal fees and so on. But there is no money and you’ll be out of pocket. There is also a similar scam coming from China that’s related to wills.

More information about 419 emails and letters on the Action Fraud website

Chinese Letter Scam fraud alert from the Metropolitan Police website

Dating fraud

Some fraudsters will connect with you on a dating website. They’ll be up-front about living overseas and will email you, getting to know you over time and becoming affectionate and romantic.

Then once you’ve become involved they will start asking for money for a sick relative or for a plane ticket to come and visit – and will happily take your money but never appear.

More about dating fraud on the Action Fraud website

Money Mules

Here you could unknowingly end up breaking the law and helping criminals by using your bank account to take delivery of, and then forward, stolen money and be paid a commission for helping. You would be breaking the law by money laundering.

More about money mules on the Action Fraud website

Boiler rooms

Also called ‘pump and dump’, this is a scam where fake stock market traders contact you out of the blue and give you the hard sell on buying shares that are either non-existent or virtually worthless and so difficult to sell on.

You might be offered secret stock tips to make it all seem more believable and sent fake share certificates to try to make the business seem legitimate. Then the fraudsters will disappear with your money.

More about boiler room scams on the Action Fraud website

Vehicle fraud

There are a number of scams around buying and selling cars. You may be sold a stolen vehicle or a cloned car where the details of the car have been changed to match a legitimate vehicle. You could pay for a car that is never delivered to you or one that doesn’t match what you’ve paid for.

Advice on buying and selling vehicles safely from the Metropolitan Police website

Online auction fraud

With the growth of online auction sites, there are con artists who will pose as fake buyers who appear to pay for the goods that you then send to them. The problem is that the payment bounces. Or there could be fake sellers who take your money but don’t send the goods, or send something that’s less valuable or very different from the description.

Tips for buyers and sellers to avoid auction fraud from the Action Fraud website

Job scams

There are a variety of job scams which range from promises of a new career, where you’re asked to pay up front for training or materials, to being offered non-existent jobs abroad where you are then asked to pay a fee to organise visas and accommodation.

Advice on avoiding employment fraud from the Action Fraud website

You might also get caught by a work at home scheme where you are told you’ll make easy money and you may have to pay a fee up front to register. However, the ‘leads’ or products turn out to be worthless and – worse still – your registration details may be sold on to other scammers.

Working-from-home fraud alert from the Metropolitan Police website

Health scams

If you see an email or an advert for a ‘miracle cure’ for baldness, cancer, impotence, acne or weight loss, then steer clear.

  • You could be offered something that appears to be a legitimate alternative medicine but doesn’t actually work.
  • Or you might think you are getting drugs and medicines very cheaply or without a prescription but they may not be the real thing – if they actually turn up at all.

In some cases these fake medicines can actually damage your health.

More about health scams on the Action Fraud website

Prize draws, sweepstakes and lottery scams

You could get a letter or email telling you that you have won a lottery, sweepstake or other prize draw and offering you a large prize. The scam can then take different forms:

  • you might be asked to send a small amount of money in order to claim it as a processing fee or legal fee – but no prize exists and you lose the cash
  • you might be asked to prove your identity with a passport – which is then used by the crooks to steal your identity
  • you might be asked to provide your bank account details so they can pay the money in but this information is then used to clear out your account
  • you might be told you have won a prize and you need to ring a special phone number to claim it – the call goes to a premium rate  number, takes ages and will cost you more than the value of the prize you’ve won

More about prize draw scams on the Action Fraud website

Property fraud

If someone offers you a get rich quick property scheme then there are a variety of ways they could be trying to defraud you.

  • You might be offered a way to buy into a development that is not yet built with all sorts of claims about the profits you’ll make – but the land is either farmland or derelict and will never get planning permission or is unsuitable for development so you’ll lose your money. This type of fraud is also sometimes called ‘landbanking’.
  • A fraudster might steal the title deeds to a property and pretend to be the owner and then try to borrow money against the property.

Find out more about the different kinds of property fraud on the Action Fraud website

Read about land banking scams on the Financial Conduct Authority website

Face-to-face fraud

There are many legitimate door-to-door sales staff – but others don’t have good intentions. You can be pressured into buying something you don’t want or isn’t worth the money you pay for it.

Fraud by bogus tradespeople can take a variety of forms:

  • fake charity collections
  • selling you unfair or unsuitable contracts
  • home maintenance or improvements that you are overcharged for or are badly done, or
  • potential thieves who are checking out your valuables once inside your home

More about fraud by bogus tradesmen on the Action Fraud website

Pension scams

Pension fraudsters will tell you they know a loophole so that you can get hold of some of your pension money before retirement. While you can make arrangements to get cash from it if you’re 55 or over, it’s likely to be a scam if you see claims that:

  • you can get cash before the age of 55
  • you can get more cash than under your current scheme, or
  • you can have more than 25% of the pension value “released”

They might charge you a fee or land you with a big tax bill.



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