Financial news

By Richard Eagling

It has often been said that in the midst of a crisis, humans act at their best and most charitable. However, such circumstances can also provide the wicked with an opportunity to thrive. The Covid-19 pandemic has been no exception – while some individuals have dedicated their time to helping those less fortunate, others have resorted to scams, targeting individuals at their most vulnerable.

Indeed, recent figures have revealed that fraud is at an all-time high – according to research, Britons lost a total of £479 million in 2020 to fraudulent bank transfers, which is a 5% increase from 2019. Worryingly, the number of transfer cases recorded in 2020 increased by 22% – suggesting that scammers are preying on even more individuals at their most defenceless.

With this in mind, Britons must ensure that they are well-equipped to deal with any potential scams, as well as understand what to do in the unfortunate situation that they are caught out. Here are some things to bear in mind…

Keeping up to date with the latest ‘trends’ 

From data breaches, false investment opportunities, identity theft, and phishing scams, fraudsters use a number of different tactics to target their victims. Nowadays, new technologies and platforms actually make it easier for scammers to go about their business, giving them an edge over unsuspecting individuals.

While people might be familiar with more traditional scams – like cold calling, or fraudulent emails – Britons should be wary of scammers who might pose as their bank, or a member of their friends and family in order to extract cash from their account. In this case, scammers might encourage individuals to click a link that will compromise their accounts or persuade them to part with personal information with the same end-goal in mind. Others may contact potential victims via telephone the day after an attempted scam; many of which impersonating an individual’s bank in an attempt to facilitate a fraudulent transfer.

To mitigate this, individuals should be wary when it comes to how they use and share their data. They must avoid sharing any personal details online, even if these appeals appear to be from trusted friends and family, and should routinely change passwords to keep accounts secure.

Additionally, if individuals are unsure as to whether they have spotted a scan, the Action Fraud website and the Financial Conduct Authority (FCA) warning list are great resources. Both of these websites provide thorough guides to identifying any new scams that may be in circulation.

Next steps  

Due to the range of sophisticated tactics used by fraudsters, some of the most well-equipped individuals will find themselves falling victim to nefarious scamming techniques. Consequently, Britons must ensure that they know how to proceed if this happens to them.

An important first step is notifying their bank – most banks will be able to block the transaction if they receive ample notice, or reinstate funds by using chargeback schemes. In some cases, if an individual is unhappy with their bank’s response and any complaint they have made it will be necessary to contact the Financial Ombudsman Service (FOS) for further support. The FOS will deal with the complaint and advise the bank as to how they should proceed with any fraud investigations.

Finally, individuals should ensure that they have reported any scams to Action Fraud, who will commit to investigating any fraudulent activity further, to prevent others from falling victim to the same scam.

Sourcing lost funds

More often than not, reinstating lost funds will be high on the agenda of those who have been scammed – particularly at the moment, when any financial loss is likely to be even more stressful than usual.

Unfortunately, depending on the type of scam, this might be easier said than done. I have already noted the chargeback method, if an individual is scammed via a traditional bank transfer. However, fraudulent transfers made using wire services like Paywire and MoneyGram may be harder to trace and reimburse. That said, each occurrence is dealt with on a case-by-case basis, so the final outcome is not set in stone until the bank makes its final decision.

It is vital to remain vigilant in the weeks following an initial scam, as some fraudsters may target the same individual again – so is worth monitoring bank statements and accounts for any suspicious activity.

Ultimately, Britons must do all they can to ensure they remain out of harm’s way – whether this is by keeping their anti-virus software up to date to protect themselves or avoiding any unexpected contact. Doing so should ensure that individuals are shielded from even the most creative and nefarious scamming techniques.

This article was originally published on 3 August 2021.

About the Author

Richard Eagling is senior personal finance expert at NerdWallet UK. NerdWallet is on a mission to provide clarity for all of life’s financial decisions. As an independent financial comparison website, NerdWallet provides consumers and businesses with useful tools and insights so they can make smart money moves. From choosing a bank account or breakdown cover to buying a house, NerdWallet is there to help individuals make financial decisions with confidence. Users have free access to our comparison tables and expert content, to help them stay on top of their finances and save time and money, giving them the freedom to do more.