As we enter another national lockdown, sadly, scammers are likely to once again be targeting consumers.
Scammers are creative, always coming up with new ways of tricking people, and fears over coronavirus have given them a perfect opportunity. But although the scams vary, there are some things they have in common.
Here are some of the main scams, and tips from our financial regulator, the Financial Conduct Authority (FCA), on how to avoid them:
- Be wary of fraudsters who claim they can help you access your pension before 55; for the majority of people, its not possible!
- If you are tempted, the tax penalties are big – 55% of your pension pot in addition to the fees you’ll have been charged by the scammers, which could be up to 30% of the value of your pot. It’s really not worth it.
- Be wary of any offer of a free pension review which has come out of the blue and suggests you can you move your money to a safe haven, or perhaps offer you high returns. Your money is likely to be invested in high-risk and unregulated investments or will disappear altogether.
- Pension cold calls are illegal so if you get one, just hang up – it’s a sure sign that it’s a scam. Ignore any offers you get via email, text or online adverts too.
- Always check that any firm you deal with appears on the FCA’s Register and then call the FCA’s Consumer Helpline on 0800 111 6768 to check the firm is allowed to give pension advice. But better still, call us.
Advance loan fee fraud
- If you’re asked for an upfront fee in order to get accepted for a loan; don’t pay it, it’s likely to be a scam. The fee can be between £25 and £450 and you may be asked to pay it by bank transfer, Western Union or even iTunes vouchers. No matter how much you pay, the loan never materialises.
- Warning signs to look for include being contacted by text or email out of the blue, or being put under pressure to pay the fee quickly.
Good cause scams
- It’s heart-breaking that some criminals target people by asking for donations to good causes. Examples have been an email pretending to be from the government asking for money for the NHS, or appearing to come from an organisation that claims donations will go towards the production of hand sanitiser or protective equipment for the NHS.
- Never download attachments or click on links in emails unless you’re sure who sent them. Even if the email is from an organisation you know, if the email itself is unexpected or asks you to click on a link, it could be a scam.
- And of course, never give personal or financial information. Not even your bank will ask you for personal information in an email.
- Only donate to legitimate charities which you can search for on the Gov.uk website charity register.
NHS Test and Trace scams
- If you’ve been in contact with someone who has tested positive for coronavirus and you are contacted by NHS Test and Trace service, you do not have to pay for a coronavirus test.
- If you receive a call where they ask for payment, you can report it to Action Fraud by calling 0300 123 2040 or by visiting its website.
- Also be careful of any links in messages you receive to the contact tracing service website. Action Fraud advises you to type the web address (http://contact-tracing.phe.gov.uk) directly into your browser rather than clicking on any link provided in the message.
Universal Credit scams
- Fraudsters have been targeting people who receive Universal Credit by claiming to offer government loans and grants linked to the benefit. Remember that the government will never ask for personal or bank details over text or email so if you receive something like this, the best advice is to ignore it.
Number spoofing scams
- Number spoofing is where a scammer sends a text message that looks like it’s come from a genuine organisation, such as the government, HM Revenue and Customs or your bank. These scams are very hard to spot especially as the messages will sometimes appear in a chain of otherwise genuine text messages. The best advice is not to click on any link in a text that appears to come from a legitimate source. HMRC doesn’t issue tax rebates by text, and banks don’t ask for personal information this way.
Clone firm scams
- These fraudsters set up websites that use names similar to those of legitimate firms, and typically cold-call you to promote worthless or non-existent shares, property or investment opportunities.
- A firm needs to be authorised by the Financial Conduct Authority to sell, promote or advise on the sale of shares or investments (including pensions) in the UK. Always check the FCA register to see if the firm is authorised; and always access the FCA’s Register directly from register.fca.org.uk rather than from any links sent to you by the firm itself.
- If you think the contact is genuine, then the best method to call the firm back is to call the switchboard number given on the FCA Register rather than the one the firm gives you, especially if you’re given a mobile number to call back. If the caller claims the number on the register is out of date, contact the FCA’s Consumer Helpline on 0800 111 6768.
- There’s been a sharp increase in the number of people visiting the websites of debt advice charities since the government introduced coronavirus measures, and scammers are taking advantage of this.
- They often have very similar names to the genuine services and charities. They’re not illegal, but you could end up paying for debt advice that you could get for free. And you may end up sharing your personal details with a company you don’t know anything about.
- If you’re visiting a website to get debt advice, always check the website address to make sure you’re not clicking on a ‘lookalike’ site by mistake.
Cold call and doorstep scams
- Not all scams are online or over the phone. There have been reports of scammers going door-to-door offering ‘coronavirus tests’ with some posing as NHS contact tracers. To avoid being scammed, ask to see the identity badge of anyone who comes to your door and claims to be from a company or organisation.
- If you’re not 100% comfortable, don’t let them in, and don’t give away financial information (such as your bank account details) either.
Other scam warning signs
- The FCA is also warning that scammers could use any of the following tactics during the coronavirus pandemic. The fraudsters may:
- play on worries you have about your investments falling in value and advise you to invest or transfer your investments into investments they recommend.
- contact you claiming to be from a claim’s management company, insurance company or your credit card provider. They’ll tell you they can help you make a claim for the cost of a holiday or a cancelled event and will ask you send them some money or your bank details.
- send you messages telling you your bank is in trouble due to the coronavirus and to transfer money to a new (bogus) bank account.
There are also fraudsters who claim to be able to give you a list of people affected by coronavirus in your area. To access the information, you have to click on a link (which will then steal your personal details) or provide an upfront payment. There have also been examples of fraudsters writing articles about coronavirus with links to a fake company website where you’re encouraged to subscribe to daily updates. DON’T