Top scams to watch out for and how to avoid them

While some scams are fairly easy to spot, others are well disguised. Every year three million UK adults fall victim to mass marketing scams losing on average £850, according to Consumer Direct.

In truth, the numbers are likely to be much higher as these are only the official figures – a large number of victims don't report their experiences.

If you think you may have fallen victim to a scam, here are three key organisations to visit online or contact over the phone: Action Fraud (0300 123 2040), Citizens Advice (0300 330 3003) or the Financial Conduct Authority (0800 111 6768).

Here we look at some of the most common ways in which conmen are scamming people for money so you can be on your guard – and how to beat the scammers:

Phishing

The most common type of email scam is 'phishing'. This is an email from a fraudster masquerading as an organisation like your bank.

They'll ask you to log on, confirm account details and passwords and then use these to raid your account. It’s important to remain vigilant because if you lose money, there’s little chance of getting it back.

Five things your bank will never ask you to do

Our tip: The rule of thumb is, if you’re asked to enter your account details in order to click through the email – avoid it, no matter how convincing the email may be.

Smishing

"Smishing" is SMS phishing where text messages are sent trying to encourage people to pay money out or click on suspicious links.

Sometimes attackers try to get victims on the phone by sending a text message asking them to call a number, in order to persuade them further.

How to stop spam text messages

Unsolicited text messages from unknown numbers should raise alarm bells, but often banks do text their customers for a variety of reasons.

Our tip: Call the bank using a number from a bank statement or a verified source, not a text message.

Boiler-room scams

A professional sounding stockbroker will call out of the blue and offer an investment opportunity with returns at around 40%.

You will most likely be told this is rare opportunity that you “don’t want to miss” and be encouraged to get into a market early while there’s still big money to be made. 

Fraudsters aim to make their business seem legitimate, so they will often use technical jargon, impressive job titles and mock websites to appear credible.

Once they reel in their victims, they get them to agree to transfer money to them, which is never seen again. Often sums handed over can be in excess of £50,000.

While most companies that sell investments in the UK are authorised by the Financial Conduct Authority by law. Boiler-rooms, are not. This means that victims don’t have the rights of redress that clients of listed firms do.

Our tip: Deal only with companies that are authorised by the Financial Conduct Authority (FCA). You can check by calling 0800 111 6768 or online at fca.org.uk/register

Vishing

This type of fraud is done over the telephone. Criminals persuade victims to hand over personal details or transfer money during a call that will come out of the blue.

They have a number of techniques which urge victims to quickly part with information they ordinarily would keep safe. You are made to believe your money is in danger and have to act quickly – fear often leads people into acting without thinking. 

The criminals already have your name, address, phone number, bank details – essentially the kind of information you would expect a genuine caller to have which makes you trust them. 

In some cases, the criminals can hold your telephone line, so if you hang up to call back the bank, you can get put straight back to the fraudsters. They even go to the trouble of making it sound genuine by creating background noise so it sounds like a call centre rather than a one-man con artist in a basement.

Our tip: If you get a call, hang up, and ring the number on the back of your credit card using a different phone from the one they called you on to see if the query was genuine.

Pension liberation scams

Scammers are bombarding people aged 55 and over offering them bogus investment opportunities to get hold of their pensions savings.

People have more choice than ever about what to do with retirement savings and can withdraw their money with greater freedom. But opportunistic criminals are increasingly trying to persuade savers to move their cash into schemes that did not exist. They can approach you by post, email or telephone.

Low interest rates on savings accounts have tempted more people to take on extra risk, which means you could get caught out by fake investments which result in people losing their life savings, leaving you with little or no money for retirement.

Our tip: Be alert to offers like this and if in any doubt, take advice from a registered independent financial adviser. If you think you may have been made an offer, contact Action Fraud on 0300 123 2040.

Informative, in-depth and in the know: get the latest news, interviews and reviews with Saga Magazine.

Research the company to stop getting scammed

Your first port of call should be to check that the company actually exists.

Review sites like Trustpilot and Yelp are a great source of information, using crowd-sourced reviews to give you an honest and unbiased view of the company you are dealing with.

Of course, if you’re dealing with an online retailer like ebay or Amazon, there is a buyer review sitting there for you to read (plus a host of safety nets in place to protect you).

Other things you can check quickly and easily include the company’s address if you are buying over the phone or internet.

Read our guide to spotting a scam email

You are looking for a physical address, rather than a PO Box, and Google Street View will show you the actually building. Is it the sort of place you would be comfortable walking in to and handing over a wad of money? If not, you shouldn’t be shopping with them at all – even remotely.

Finally, you can check a company’s status online through Companies House. This gives a wealth of information, including the names of the directors.

Google the phone number

An even quicker way to check a company or individual is to Google the telephone number. You’ll be surprised at how often you’ll get a hit that links to a warning.

Google the seller’s name

This is a simple way to check out a private seller. Nine times out of ten you’ll draw a blank, but when you do get a hit it’s rarely good news.

Buying a second hand car? Read our guide to scams to avoid

Pay with a credit card

If you are buying something, then paying with your credit card gives you extra protection under Section 75 of the Consumer Credit Act.

As long as you’ve paid a minimum of £100 on your card, section 75 makes the credit card company equally liable for any losses you might incur, something that is worth remembering when you’re buying a high-value item.

Consider PayPal

PayPal gives similar protection and can be useful if you are buying from an individual and so can’t use your credit card.

Read our guide to shopping safely on ebay

Escrow accounts

Never pay into an escrow account. There are, no doubt, legitimate escrow accounts out there, but many are not and there is simply no reason to ever use one.

Don’t - that's right, don't - read the small print

If there is a lot of fine print to read and agree to, then it might well be a scam. Think about it: you don’t go through that rigmarole when you’re buying from M&S, do you? If they’ve put small print in there you can guarantee there’s a scam buried in it somewhere.

Watch out for scammers in supermarket car parks

Use your intuition

And when all’s said and done: use your intuition. We’ve evolved over millions of years into the most adaptable and successful animals that have ever walked the face of the earth, and we’ve done so by having a finely tuned sense of danger. So if a deal feels wrong, or just looks too good to be true, it probably is and you should just walk away.

More surefire signs you’re entering a scam

Those con artists behind mass-marketed scams are constantly coming up with new ways to target us – whether it's by post, email, text, private messaging online or on social media platforms. But one key point never changes: they're only after your money.

It’s your job to stay one step ahead of them to avoid falling victim and being stung for your hard-earned cash.

Here we arm you with a crucial checklist of surefire signs that a scam is on the horizon and alarm bells should be ringing:

Spelling mistakes and poor grammar

If you are approached via email, text, social media or post, look out for spelling and grammar mistakes. That’s not to say mistakes don’t happen but in the main, a professional and genuine outfit will never send correspondence with obvious errors in it.

The tone of the letter or email is also relevant. Those who address you as 'Dear Client' or 'valued customer' should be regarded as high risk.

Being rushed to make a decision

A time limit on an offer or request for details should also raise questions.

Conmen will often try to hurry your decision making, so make sure you take your time to consider if it’s a genuine email. A con artist will try to pressurise you into making a speedy decision. Any genuine offer would allow you plenty of time to make an informed decision.

An unbelievably good deal

’Unbelievably’ being the operative word here. If it sounds too good to be true, it probably is. This age old mantra will stand you in good stead for avoiding rip-off schemes.

Most mass-marketed scams seem to offer something that sounds attractive, but in reality they don’t exist. They're mostly quite plausible – but there's always a catch, be it the premium number you have to call to claim your prize, or the up-front payment to secure the best deal.

Trust your memory

If you are told you’ve won a prize in a competition you don't remember entering then it’s probably because you didn’t.

Companies rely on people assuming they have forgotten and seek to get them to hand over cash to release their prize, or to call expensive premium rate telephone numbers which end in nothing but a big fat phone bill.

Equally, if you receive unsolicited mail from a company claiming to know you, but you don’t remember dealing with them – trust your instincts. Conmen take great pains to convince you they've dealt with you before to win your trust.

Scammers sell or trade lists of names and addresses, which is why so many people get bombarded with scams if they fall for just one.

Asking for cash or your personal information

If you are asked to part with cash or personal details or passwords…just don’t.

Never give any money upfront, or your account details. No decent business proposition will require money upfront.

An investment, of course, will require a sum to be paid, but this is only at the final stage when you have completed all your checks.

No bank or financial services institution with proper safety standards in place will ever ask for your full account or password details.

Informative, in-depth and in the know: get the latest money news with Saga Magazine.