How to spot the scams that are targeting your cash during lockdown

9 min read
May 04, 2020
How to spot and avoid scams

As we’ve learned during the lockdown, technology is a wonderful thing. But as the ways we can communicate, shop and interact increase dramatically, so do the numbers of fraudsters, scammers and all-round con-artists.

So Resolver spoke to top broadcast legal expert, Arun Chauhan, for his tips and guidance on the old scams doing the rounds and the new ones to watch out for.

Over to you Arun!

In times like these when the country needs to pull together, fraudsters – from lone wolves to organised crime gangs – look to pull us apart.   History has shown us that when there is a genuine crisis, like a major bank’s IT systems going down or the current global pandemic, fraudsters play on the public’s fear and panic to steal money.

Sadly, COVID 19 has presented a huge opportunity for fraudsters to go on the attack causing significant financial losses to countless people.  This has an impact globally. In America, people reported $12m of fraud-related loss by early April 2020.  In the UK, fraudsters have stolen approximately £2.3m in the 10 weeks to 20 April 2020 through scams exploiting public fear over the spread of COVID 19.

Already, 1,000 COVID 19 related scams and nearly 4,000 phishing attempts by criminals have been reported by members of the public to the police with the majority of reports relating to online shopping scams, in which people order face masks, hand sanitiser and COVID 19 testing kits which never arrive.

So what do you need to watch out for. I’ve covered some of the current scams doing the rounds in this article, along with some practical advice and tips to help you feel more comfortable if concerned about a transaction – or if you suspect fraud.

What type of frauds/scams are consumers facing?

Advanced fee fraud and push payment scams

How does it work?

Advance fee fraud is where people are tricked by fake websites or emails in to making payments as an ‘advance’ for goods or services. These payments are often small, say a tenner, so they might seem no big deal at first.  Keep an eye on your bank and credit card payments in case a fraudster or dodgy firm hits you with a big bill for spurious goods and services.

Sadly, the now notorious push payment fraud is still doing the rounds. This scam works in various ways, including telephone calls, visits from ‘official’ people to your doorstep, ‘spoofed’ text messages and phony emails from official bodies or legal sounding professions. The one thing to remember is no reputable firm will contact you and ask you to transfer your money to another account. Walk away from the fraudster, collect your thoughts and seek help. If you have transferred money, the sooner you speak up, the better your chances are of getting it back.

How do I avoid it?

Do a bit of research, like checking an official webpage or phone number. Don’t just click the first one on Google, fraudsters have been known to take out paid advertising so go through official channels on the bills or letters you have from the organisations.

If you receive bank details to arrange a payment, call the person you are paying to verify the account details.  If you can, make a test payment of a £1 to make sure the payment is received by the person you intend.

Banks are now rolling out ‘confirmation of payee’ so that they will flag if the person you intend to pay is not the person named on the account you are paying.  This simple method of identification has – incredibly – not been cross checked until now.

Romance fraud

As we face an increasing period of lockdown and of social distancing, people of all ages, especially those living alone, are being targeted on dating apps and websites.  Fraudsters prey on the lonely to give them some form of hope and happiness only to then lure them into handing over cash. You may be quick to judge, but these fraudsters are experts at emotional manipulation, asking for help, some money to help a family member affected by coronavirus, even transfers to help those stranded abroad.  It is also now a common technique to gradually gather your personal information whilst chatting – data that can be used for identity fraud.

How do I avoid it?

Be vigilant and have a health amount of skepticism.  If you start chatting to a new person, try to be conscious of what information you are sharing.   If you are asked to send money, you may be asked not to tell anyone as they are embarrassed.  The fraudsters will hope you will respect their request. Fraud with the romance element works on the basis that you might not talk about your romantic life to many people.  My advice is speaking to a friend or family member you trust just to see what they think – but if you have any doubt, do not pay.  The same goes for charity appeals on social media. Check them out first to see if they are legit. 

Pension and investment fraud

In recent years, thieves have focused on the ‘big hits’ of pensions and investments. The scams work by playing on fears that money set aside for retirement is dwindling or not earning any interest.   Fraudsters look to exploit those concerns, seeking to convince you there is a great opportunity to invest – often with an air of exclusivity.  They direct you to glossy websites and brochures (sometimes faking the website of a real business so the name sounds familiar) offering returns which you cannot find elsewhere.  These investments may be in a range of opportunities from property to cryptocurrency.

The fraudsters often place pressure on you to make a quick decision, starting at a higher figure but letting you move down to a number you are comfortable with.  Ultimately, these tactics sound too good to be true – and as the old adage says, if it is too good to be true it probably is!

How do I avoid it?

Again, be vigilant.  If you are approached, contact the Financial Conduct Authority, the financial services regulator, to verify the company making the proposal is legit. Get the real contact details from the FCA too just in case the fraudster is faking a real firm. There have been instances of legitimate companies’ websites being cloned and being used to interact with the victim of fraud. These websites are very convincing.    You can also visit the FCA’s website where they have a scam warning page

Other methods to help yourself can be checking Companies House.  This is useful if you are approached with a property ‘opportunity’ by a company.  See if they exist on Companies House and how long they’ve been trading.  You can find their accounts for previous years. Beware foreign property deals, especially ‘land banking’ – buying property on the understanding that development is penciled in so you can cash in when it goes ahead.

If you are considering spending a large amount of money you might want to consider legal advice first.  It may cost a little bit of money but it could save you thousands.

Probate fraud

Due to a higher rate of people dying due to COVID 19 the counter-fraud community are anticipating more fraud attempts on the accounts and assets of those who have recently died.  The lockdown has meant family visits have been severely impacted and the process of seeking a grant of probate or simply notifying banks of death is impacted too. This has allowed a window of opportunity for fraudsters to try and steal identities or fake being a family member to gain control of bank accounts, create fake claims against the deceased’s estate or find another route to trick an executor to part with money.

How do I avoid it?

Okay, deep breath everyone. We need to get better about talking about death. It’s not easy but we should all be speaking to our families collectively to talk about what we want if we do become ill, unable to care for ourselves or die. Sometimes talking euphemistically means we tie ourselves up in knots, so be honest, speak in plain terms and keep it brief.

Gary Rycroft gave Resolver some tips recently on writing a will. Check out his article. Also, keep in touch with older or more isolated relatives.

Identity theft

This might be a bad time for burglars, but it’s not so traumatic for specialists in identity theft. Many people live in apartments and cannot easily access their post regularly. Some items are being left on doorsteps due to social distancing. You may also be having a clear out of your old tat and have dumped a lot of documents in the recycling.  Surprisingly little data can be used to create a fake you. So be cautious and stay vigilant.

Prevention advice

There is little you can do about your post being stolen, however you can make sure your passwords for online or telephone banking are secure and different from other passwords you use.  That way, even if a fraudster gains sufficient information to try and trick your bank’s identity questions, they still have to get past the passwords.

If you do find your identity has been stolen, contact credit rating agencies and explain.  They can amend your credit reference file and history if you give them all the details. Report the matter to the police and get a police reference number.

And finally…!

In order for the government to gain a better understanding of the fraud risks people are facing, crimes need to be reported.   Even if the reality is that the police will not be able to investigate, please do report the matter to Action Fraud.  The information gets fed into a central database and experts and the police can learn more about risks to help others stay safe.

And the golden rule? Take a few minutes to stand back, walk away from the computer or put down the phone and consider what you are being asked to do, if in doubt check up with a reputable and trusted source of information and do not get pressured into doing something. And never transfer money if a stranger gets in touch. Not even if they say they’re from the police or your bank.

Arun is a specialist fraud lawyer and founder of Tenet Law.  He’s also a regular TV expert and has been on everything from Watchdog to Panorama. He’s also the Deputy Chair of the counter fraud charity The Fraud Advisory Panel (and his signature dish is risotto if you’re nearby and feeling peckish!)

We hate scammers at Resolver. But if you’ve been ripped off and you’ve not got any help from your bank or card provider, Resolver will help you make a complaint for free.

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