According to the Fintech Times, UK residents lost £4 billion to fraud last year. In the midst of a cost of living crisis, people are eager to secure their financial future, but unfortunately, scammers are taking advantage of this.

Criminals are constantly developing new and inventive ways to come between you and your wealth. If you want to protect yourself, it’s important to be aware of the latest scams.

These are some of the most worrying scams to watch out for in 2023.

1. Remote purchase fraud

A report from MoneyAge reveals that credit card fraud reached an all-time high in 2022.

It takes many forms, including remote purchase fraud. This is when scammers convince you to hand over your banking or account details on the phone or online, so they can make purchases with your card.

According to Money.co.uk, incidents of remote purchase fraud have doubled in the last five years, so you need to stay vigilant when transacting online.

Always check the legitimacy of new websites before entering your card details by searching for the company online. Look for the padlock icon in the address bar as well, as this shows that the site is encrypted, and your information is protected.

You should still be on the lookout when using cash machines too, because plastic card fraud – compromising the data on a physical card – is still the most common type of credit card fraud, with Money.co.uk reporting that 2.8 million offences were recorded in 2022. Always cover your PIN and if you are suspicious that a cash machine has been tampered with, don’t use it.

2. Investment scams

Investment scammers can be hard to identify because they often look like legitimate companies. Scammers will offer to put your money into an amazing new investment that promises excellent returns overnight. However, they never materialise and, worse, you’ll also often lose your initial investment.

Sometimes the money is invested, but the opportunity has been misrepresented, and you suffer big losses. However, many of these investments don’t exist at all, and the money goes into a so-called Ponzi scheme, where money from new victims is used to pay off people who have already been scammed.

There are some tell-tale signs that will help you spot an investment scam:

• You’re contacted out of the blue about an investment opportunity
• You’re pushed to make a quick decision or it’s a “time-limited” offer
• The scammer will use lots of jargon and technical language, so you don’t fully understand the investment
• They will offer returns that seem highly attractive while also downplaying any risk.

As a rule, ignore cold calls about investments, and if you do speak to somebody about an opportunity, watch out for these signs.

You can also check the FCA warning list and register before investing to check that the investment is legitimate.

If you’re unsure whether an opportunity you have been offered is genuine, speak to us. We can help you to establish whether the investment is legitimate, so you don’t fall foul of a con.

3. Pension scams

There are several common pension scams you should be aware of. Despite pensions cold-calling being against the law, many fraudsters will still try to come between you and your hard-earned retirement savings.

Fraudsters may encourage you to cash out your pension early – before age 55 – and offer to invest it for you. They often claim they can use a loophole to help you avoid the tax liability, but there may be a fee for this.

The reality is that it’s generally not possible to access your fund early, and you could end up paying both tax charges and hefty fees.

Some fraud victims are targeted twice by ruthless scammers. After running a pension scam, they contact you again, claiming to be from an organisation that can help you recover the money. They will ask for an upfront fee for administrative and legal costs, and once paid, they will not contact you again.

If you are the victim of a scam, contact the police and report it through Action Fraud rather than working with a claims management company you have never heard of.

You should always contact your pension provider or financial adviser directly with any questions about withdrawing money or making changes to your retirement plan.

4. Claims management scams

Claims management companies help you make complaints against financial institutions. They offer an important service that helps protect consumers, but there are some fraudulent companies out there too.

They will cold call you and tell you that you have been mis-sold a pension or investment, and they can help you recover lost money. However, they require a fee upfront to start an investigation into the non-existent problem.

If you have any concerns, check the FCA services register to ensure the company is regulated before agreeing to their terms.

5. Mum and dad scams

According to The Guardian, £1.5 million was lost to “mum and dad” scams between February and June 2022.

This is a simple scheme where scammers pose as your child, contacting you over text or WhatsApp pretending that they have been locked out of their banking app and need you to pay a bill for them. They’ll send you the details, and the payment goes directly to the scammers.

These messages often look extremely plausible, and it is even possible for criminals to hijack somebody’s phone number so the message appears to come from your child.

Although legislation is being written to force banks to refund the money, this can still cause serious financial issues. To be safe, always call the person requesting cash before sending any money.

Keep your money safe from scammers

If you’re worried about the increasing level of financial fraud, here are some useful tips to identify and avoid financial scams:

• Ignore any cold calls about pensions and investments
• Don’t invest in something you don’t understand or feel rushed into
• Research any new websites before entering your card details
• Search investment and pension companies on the FCA register and warning list.

Remember this: if something sounds too good to be true, it probably is.

Get in touch

If you need advice concerning your pensions and investments, speak to us. We can ensure that all the decisions you make are genuine and legitimate, and help to protect your wealth from fraudsters.

Email info@blueskyifas.co.uk or call us on 01189 876655.

Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future results.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts.