Over the years, advancements in technology have made a huge difference to our lives. Some medical treatments never even thought possible decades ago are now commonplace and there are so many engaging and fun ways to stay in touch with relatives and friends.
But sadly, with advancements in technology come more ways for fraudsters and scammers to take advantage of unsuspecting victims.
Indeed, Brits lost more than £177 million to impersonation scams in 2022. Figures recently released by UK Finance revealed that 45,367 cases of impersonation fraud were reported in 2022.
This type of fraud is very popular with scammers, but it’s also important to be aware of another increasingly attempted scam: “clone firm” investment frauds. In fact, since the beginning of 2021, more than £36 million was lost to fraudsters claiming to be from investment companies.
Read on to find out exactly what the fraudsters and scammers tricks are, how their scams work and how to protect yourself.
2 types of impersonation scam to look out for
There are two main varieties of impersonation scam you should be aware of:
- Vishing
- Phishing
Vishing typically occurs on the telephone, with the fraudster pretending to be from your bank, the police, a utility company, or perhaps even a family member or friend. It is usually either a request for financial and personal information or a direct request for money.
A common current scam sees a fraudster pretending to be from your broadband provider. They tell you that they need to fix issues with your internet connection, push you to download some software to give them remote access to your computer, and then ask you to log in to your online banking for them to “give you a refund as a goodwill gesture”.
Phishing is the most common form of impersonation fraud, normally starting with a message, either by text, email, or social media.
The scammer will pose as a reputable company or organisation, or even somebody you know, and ask you to click a link to enter your personal details into a form. The scammer will then use the details you fill in to access your financial information and steal your money or intellectual property.
With technology advancing all the time, fraudsters are using more inventive ways to dupe unsuspecting victims, including using technology that allows them to display a genuine company’s phone number on your screen. This can trick you into believing that the phone call is legitimate.
How to prevent it from happening to you
If you have any concerns when you receive a message or a phone call, hang up immediately and then contact the company the caller claims to be from using an independently verified number, such as the ones found on your bank statement or most recent energy bill for instance. You can ask the provider if the original call was genuine.
It’s important to note that the police, banks, and other organisations will never contact you by email or phone and ask you to provide them with personal details, remote access to your computer, your online banking card reader codes or your credit or debit card numbers.
Watch out for clone firm investment scams
Clone firm investment scams involve fraudsters using websites and literature that copy the details of legitimate and authorised companies.
These can often be incredibly convincing, and scammers are increasingly sophisticated in the ways in which they try and gain your trust. As well as posing as a genuine business, they may even use the names of legitimate employees from the relevant organisation or company.
Scammers often target victims through fake advertisements on search engines or social media, with the ads linking to a replica of the genuine company’s website.
There are five main ways in which scammers will attempt to defraud you using a clone firm scam:
- Asking you to send application forms by unsecure email
- Attempting to discuss your financial and personal information by unsecure email
- Giving you a seemingly genuine call to promote an investment
- Trying to get you to send money by bank transfer – often to an overseas account
- Asking you to directly invest in a product through social media or search engines.
What you can do to protect yourself
If you are concerned about the legitimacy of the company you are speaking to, immediately check the Financial Services Register, maintained by the Financial Conduct Authority (FCA).
The FCA authorises almost all financial services companies in the UK, so if the company in question isn’t on this list, it may well be a scam.
You can also call the firm’s contact number on the FCA register. If already on the phone to the company in question, or someone claiming to be from there, end the call, check the register and then call the company back on the number found on the FCA website.
Finally, you can also check the FCA warning list. If the company if known to be operating without their permission, they may well be on this list. Additionally, even if they aren’t on the warning list, it could still be a scam, as fraudsters will change company details and names all the time.
Here’s what to do if you think you’ve been scammed
If you’re concerned that you might have been scammed, it’s important to inform your bank. They will replace your cards if they have been compromised, increase security on your account, and provide useful information on how to spot scams and fraud.
You can also register with Cifas and have your name added to the National Fraud Database. This will mean that companies will undertake further checks before they approve applications for financial products in your name. Membership of this scheme costs £20 for two years.
Finally, you should report any scams or fraud to Action Fraud. Run by the National Fraud Intelligence Bureau and the City of London Police, this service is the UK’s national reporting centre for internet crime and fraud. You can either submit a report on their website or call them on 0300 123 2040.
Get in touch
If you have been offered an investment opportunity, or you want to make sure that an investment you’re considering is not a scam, we can help. Email hello@sovereign-ifa.co.uk or call us on 01454 416653.
Please note
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
