Staying safe from impersonation scams

The fight against scammers and fraudsters continues for both businesses and individuals. Modern technology has helped to create new ways for fraudsters to target and bombard individuals with texts, calls and emails. Fraudsters often use impersonation tactics to pose as a trusted organisation.

It is vital that businesses and individuals are on their guard against potential scams. Here, we take a look at the threat posed by scams and consider some steps to protect against them.

Millions of pounds lost to scams

£177.6 million was lost to impersonation scams in 2022, according to data from UK Finance.

The data showed that there were 45,367 cases of impersonation scams in 2022. It also revealed that just 51% of individuals always check whether a request for personal data or money is legitimate.

Impersonation scams take place when a criminal pretends to be a trusted organisation such as a bank, the police, a delivery or utility company, or even a friend or family member. The scams can be very sophisticated and often start with a call, text, email or direct message with an urgent request for money or personal and financial information.

The research found that younger adults are particularly at risk. Just 38% of 18–34-year-olds always check a request for their money or information is genuine – the lowest of any age group. This age group was also the most likely to believe that they had been contacted by a criminal after they had responded to an initial request for information from what they thought was a trusted organisation.

UK Finance says individuals should stop and take a moment to think before parting with money or information; challenge any unsolicited communication; and protect themselves and their finances by contacting their bank immediately if they think they've fallen for a scam.

Take Five

The Take Five to Stop Fraud campaign urges people to take a moment to stop and think before parting with their money or information.

The campaign brings together law enforcement, government to encourage members of the public to be more vigilant against fraud, particularly about sharing their financial and personal information, as criminals seek to capitalise on the cost-of-living crisis.

Criminals are experts at impersonating people, organisations and the police. Take Five advises:

Stop: Taking a moment to stop and think before parting with your money or information could keep you safe.

Challenge: Could it be fake? It's ok to reject, refuse or ignore any requests. Only criminals will try to rush or panic you.

Protect: Contact your bank immediately if you think you've fallen for a scam and report it to Action Fraud.

Too good to be true

The cost-of-living crisis has provided another avenue of attack for fraudsters with a rise in fake fuel vouchers, phone bill discounts and supermarket offers being reported.

These scams use tactics like phishing emails and fake ads in order to encourage people to handover their personal information over the phone or by registering on a bogus website.

If you see an offer that sounds too good to be true, it probably is. Always check the brand's official website or social media channels to verify whether an offer is authentic.

Devastating pension savers

Pension savers have long been a target of scammers. Pension scams often include free pension reviews, 'too good to be true' investment opportunities and offers to help release money from your pension, even for under 55s, which is not permitted under the pension freedom rules.

Pension fraud can have a devastating impact, both financially and emotionally, but anyone can fall victim to a fraud if they are not careful.

Protecting your pension

Although a ban on cold calling in the UK, including emails and texts, was introduced at the beginning of 2019, the problem continues. Cold calls are a major red flag for scams and unsolicited offers should be ignored or rejected. Cold callers will often offer a free pension review. Professional advice on pensions is not free – a free offer out of the blue is probably a scam.

It is crucial that pension savers know who they are dealing with so checking the FCA Register is imperative. Dealing with an authorised firm gives access to the Financial Ombudsman Service or the Financial Services Compensation Scheme (FSCS), which can hold firms to account and give financial protection.

A common scam is to pretend to be a genuine FCA-authorised firm (called a 'clone firm'). The contact details on the FCA Register should always be used, not the details the firm gives out. 

Pension savers should never allow themselves to be rushed or pressured into making a decision. They should not be afraid to miss out on an 'amazing deal' because of artificial deadlines, and if promised returns sound too good to be true, they probably are.

Impartial information, financial guidance and advice are all key to making a good decision before changing pension arrangements. 

Anyone and every business are potential targets for fraudsters and scammers, so always check before you respond to messages, even if they appear genuine at first sight. If in any doubt about contact, please do get in touch.

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