Scammers use bogus emails when they are ‘phishing’ for victims’ bank details (Photo by Christian … [+]
The UK government, regulators and financial organisations are urging people to be extra vigilant as fraudsters seek to exploit the coronavirus (COVID-19) crisis.
Official advice from gov.uk says the scams are taking many forms, including illicit pension transfers that syphon money into criminal accounts, bogus high-return investment opportunities, and the sale of worthless health supplements and of safety equipment that is never delivered.
This activity is taking place against a backcloth of routine fraudulent activity such as ‘phishing’ for sensitive financial information via emails or impersonating a person’s bank on an unsolicited telephone call in the hope of persuading the victim to transfer money to the fraudster’s account.
How to protect yourself
Government advice on avoiding the lure of scammers includes:
- never giving out personal details (bank details, address, existing insurance/pensions/investment details)
- rejecting offers coming out of the blue
- establishing a company’s credentials via FCA’s Financial Services Register
- not opening emails or clicking on links or from senders you don’t know
- being wary of promised returns that sound too good to be true
- taking time to check all information
- seeking separate expert advice before acting.
The Financial Conduct Authority operates the ScamSmart website to provide guidance on protecting against fraud. It notes that the most searched-for investment and pension scams are:
- cryptocurrency (such as Bitcoin)
- binary options
- foreign exchange
- pension review
- pension loan/liberation.
Binary options are a form of betting where stakes are placed on an event happening or not, such as a share price moving up or down. They are banned in the UK so any offer involving them is de facto likely to be a scam.
Pensions have become a favoured hunting ground for scammers in recent years. They seek to capitalise on changes that came into effect in 2015 which relaxed the rules on when people can withdraw money from their pension without paying tax.
It is illegal to call anyone about their pension without prior arrangement, which means any such call is likely to be fraudulent.
Ultimately, people are being urged to bear in mind the age-old advice: If it sounds too good to be true, it almost certainly is.
Ghost brokers haunt insurance customers
The Association of British Insurers (ABI) says that, in addition to scams involving high-risk investment and pension products, people should be wary of fraudsters offering bogus insurance products.
The fraudulent activity highlighted by the ABI includes:
· Robocalls or automated texts that claim to be from legitimate insurance companies. They ask for a fee to recover losses associated with a missed holiday or an event cancelled due to coronavirus, such as a wedding
· Pension and investment scams offering a guarantee of higher returns than current savings
· Ghost brokers selling fake or invalid policies, including products such as travel insurance offering COVID-19 protection
· False insurance cancellation, where callers say a policy has been cancelled and can only be reinstated if a fee is paid over the phone.
Other scams include text messages purporting to be from HMRC and offering tax rebates that will be paid once the victim passes over their bank account information. Similar communications claim tax is owing and demand immediate payment.
HMRC says categorically that is never offers rebates or demands payments in this way and does not ask for sensitive, personal information such as a full address, bank account details or passwords.
‘Experts at exploitation’
Mark Allen, ABI’s manager, fraud and financial crime, said criminals are experts at exploiting situations for their own gain. “Coronavirus is a perfect opportunity for them, so people need to be on their guard. Consumer scams can leave people seriously out-of-pocket. If someone offers you a deal that looks too good to be true, then it probably is.”
According to Detective Chief Inspector Andy Fyfe, head of the City of London Police’s Insurance Fraud Enforcement Department, fraudsters will stop at nothing to try to steal money: “They are heartless and selfish criminals, who have no qualms about using tragic events, including the COVID-19 pandemic, to make them money.
“Several of our past cases have involved fraudsters who exploited other human tragedies, such as the Grenfell Tower fire, London Bridge terror attack, and the Manchester Arena Bombing.”
Basic checks to identify scams
Other advice circulating at the moment includes looking for a padlock sign on transactional websites, as this indicates strong security levels, and checking the spelling and grammar used in any official-looking email – this is often an area neglected by fraudsters.
It is also important to install anti-virus software on computers and to accept software upgrades from trusted sources, as these may contain enhanced security measures.
Householders should always be suspicious of people who call at their door demanding money, such as scammers claiming to be from the local council and asking for payment to deep clean the property against the risk of infection.