Financial scams on the increase during lockdown
09 October 20  /  Insights

You may think you are sufficiently savvy not to fall for financial fraud whereby a scammer contacts you by phone or email seeking information or payment. But scammers are clever and convincing, and it is often difficult and to tell if they are legitimate or otherwise, causing many people to fall victim to fraud.

According to a recent article in the Financial Times (19th August 2020), financial scams in the UK have been surging during the coronavirus lockdown. The most recent increase relates to investment scams, with scammers targeting customers looking for a better return on their investment and offering bogus investments. Earlier in lockdown, the biggest rise involved impersonation scams, in which criminals pretended to be tax officials, utility providers or bank staff seeking payment and personal information. In June, HM Revenue & Customs reported that scam tax emails had risen by 74% since January.

Our CEO and Financial Planner, Dan Weston has first-hand experience of this particular type of impersonation, showing just how easily you can be duped into giving away cash. His partner, Elena, received a call advising that she was being investigated by HMRC for tax evasion. As an employee of Nationwide, Elena is clued up on financial fraud and has been trained by the Building Society to recognise the signs and warn her team of the dangers.

Particularly worrying in this instance, however, was the fact that the caller had her Unique Tax Reference (UTR) number, which should be known only to her employer and HMRC. The caller advised that she must pay the outstanding tax immediately and, if not, would be prosecuted. Elena asked why they wanted her to pay the outstanding amount into a personal bank account, at which point the caller became aggressive and told her to pay now, or the police would be called.

Elena asked if she could call them back, which is a great tip, as a fraudster generally does not want you calling them. She was told this was not possible as the call was being recorded for her safety and this would be stopped if the call was disconnected. She was put through to someone else to collect payment, at which point she said she wouldn’t pay, suspected it was not a legitimate call and ended the conversation.

Needless to say, Elena heard no more, but on reflection, her biggest worry is how easy it is to fall victim to this type of crime, particularly for those who are vulnerable or elderly. The threat of the police paying a visit could easily convince a vulnerable person to pay up.

According to the Financial Times article, financial fraud against UK bank customers increased by two-thirds in the first half of the year, with Barclays Bank reporting a 66% increase in scams compared to last year. As lockdown measures were eased and customers became more willing to spend, fraud volumes rose by 61% between May and July. Latest reports from Barclays warns savers to be aware of scams related to staycation holidays, with an increase in fraud around camper van sales already reported.

The advice is simple: don’t release any information or payment to somebody contacting you by phone or email. The chances are it is a fraudster. Instead, find the number of the institution involved, either on a recent statement or communication, and phone them, asking for clarification. If it is a legitimate call, they will have a reference, if not, you know you’ve been targeted by a fraudster.

As Financial Planners, Mathews Comfort work to the highest professional standards and are authorised and regulated by the Financial Conduct Authority, designed to protect the integrity of the UK financial system and ensuring we offer an open, transparent, accountable service.

For help and advice, call us on 01865 208 000 or email us at: info@mathewscomfort.co.uk

Source:

‘UK financial scams surge during coronavirus lockdown.’ Matthew Vincent August 19, 2020

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