Top 5 financial & bank scams in the UK

Financial scams are becoming more and more sophisticated. Fraud specialists are working hard to tackle them but we all need to be on our guard to keep our money safe. Scams look and sound legitimate, which is why it’s easy to be tricked. Below are five common scams and how to fight them. For details of current scams reported to us, visit our fraud page.

1. Boiler room schemes

These scams promise investors an impressive return but deliver nothing but a big loss.

You get a call out of the blue offering you an investment opportunity with high returns. You will most likely be told that you must act fast and transfer your money straight away. It’s common for victims to part with tens of thousands of pounds. The Financial Conduct Authority (FCA) doesn’t authorise boiler rooms, so if you hand over your cash, it might be the last you see of it.

Fight back

Check the FCA status of any firm you intend to deal with. Check the FCA register or call 0800 1116768.

2. Phishing scams & smishing scams

Phishing (email scams) and smishing (texting scams) are the most common kinds of scams. Fraudsters pose as someone official, such as your bank or building society, and send you an email or sms asking you to click a link and verify your account and password details. This is actually a fraudster contacting you, who can read the information you type in, should you fall for their trick.

This information is then used to raid your account. If you lose money this way, you won’t get it back. 

Also look out for any suspicious-looking email addresses and email attachments and don’t open anything you’re not sure about.

Fight back

Your bank will never ask you to disclose full security and password details, so alarm bells should ring. If in doubt, call your bank and ask them if they have tried to contact you.

3. Pension liberation schemes

Scammers are bombarding people aged 55+ with bogus investment opportunities to try to get hold of their pension savings.

One of the most common scams since the pension freedoms were announced involves alleged investment opportunities abroad. Consumers have been offered free pension advice or investment opportunities by phone, text or email.

Low interest rates have tempted people to take extra risks, making them vulnerable to such fake investments. Fraudsters can approach you by post, email or phone.

Read more about pension scams

Fight back

If you’re offered a ‘must-have’ investment or a free pension review out of the blue, be wary. Also be concerned if you’re warned that the deal is limited and you must act now. Choosing the right retirement income product is a big decision and shouldn’t be done quickly or under pressure.

Consult a registered independent financial adviser. If you think that you may have been made a fraudulent offer, contact Action Fraud on 0300 1232040. You could also visit the FCA’s ScamSmart site FCA’s ScamSmart site to see if the investment you’ve been offered is on their warning list.

4. Homebuying fraud

This con intercepts cash transferred as a home deposit to a solicitor in the lead up to exchange and completion. A computer hacker monitors emails sent between a solicitor and client. When a house sale money transfer is about to be made, the fraudster emails the homebuyer pretending to be the solicitor and tells them the details of the law firm’s bank account have changed. The unsuspecting homebuyer sends their cash to the new account, where the fraudsters withdraw it.

Fight back

If you’re buying a property, watch out for any emails about payments, such as a change in bank details at the last minute. Many victims are told that the account is being ‘audited’ and so another one must be used. Contact your solicitor if you’re in any doubt.

5. Freebie scams

Seemingly free trial offers for products are duping consumers out of millions of pounds a year. To get the freebies, you need to enter your card details – although you’re told you won’t be charged for the introductory period. In fact, this free trial scam means you are often signing up to an expensive monthly subscription that is very difficult to get out of. Once this type of billing is approved – known as ‘continuous payment authorisation’ - money can be taken without any further contact.

Fight back

Don’t get carried away with the prospect of freebies. Be careful about handing over card details online. If you can’t see any clear terms and conditions of what happens to your details before you enter them, step away.

Read more about what to do if you suspect fraudulent contact