Scams and how to spot them

The team at Berley works hard to help our clients succeed, both from a business perspective and personal wealth. So it pains us considerably to hear about those who have fallen prey to unscrupulous scammers – the dregs of society that haven’t yet figured out a way to make an honest living. We thought it may be useful to share some of the latest ways scammers try and get their hands on your assets and how to spot them.

how to spot scamsIt might be the only good bit of news for 2020; a decline fraud was reported by the Crime Survey for England and Wales. However, before you start celebrating bear in mind that those 3.7 million incidents don’t include business fraud.

Rates for business fraud depend on which of the 3 reporting bodies (Cifas, Action Fraud and UK Finance) you consider. And depending on this you’re looking at an increase of between 7% and 47%.

Furthermore, Experian reported an increase in 33% increase in fraud during the lockdown period – because crime isn’t furloughed!

When does a fraud become a scam?

As far as police services are concerned there is no difference between a fraud and a scam although it’s seen slightly differently by financial institutions. Here a scam is identified as being a situation where the customer was tricked into taking actions which allowed for authorised transactions to take place.

Essentially, a scam involves handing over personal information or making unnecessary payments. The familiar image of scams is that of an elderly person handing over their life savings for a dodgy roof repair or in response to an email from a Nigerian Prince. And this view suggests that it’s something that only happens to other slightly foolish people.

But being scammed can happen to anyone and it’s not just individuals. 65% of fraud and cyber offences are reported by businesses. And there are indications that scams are massively under-reported.

And don’t underestimate the potential impact of a scam. Victims of scams are impacted by the loss of funds and, in many cases, the psychological trauma of being duped. For a business, the loss can be more than just financially damaging. It can also cause reputational harm particularly in cases involving counterfeit goods or data breaches. With scammers increasingly targeting businesses and individuals with a higher worth we want you to be aware of the different types of scams and how to recognise them.

How do I know if I’m being scammed?

Scams are designed for criminals to get their hands on your money one way or another with a huge variety of approaches. But generally, they are a reworking of a handful of methods designed to get personal details, information or the cash itself. They can be worked both offline and online. Developments in technology might have appeared to offer protection in some cases. For example, it’s much easier to make payments so no need to keep large sums of money at home. But the rise of email, social media and online banking have simply opened up new scamming opportunities. Remixing scams means there’s plenty of overlap between different scam types making them more difficult to spot.

Below we’ll look at some of the different types of scam and how you can protect yourself, your money and your business. At a basic level, all scams are using a mix of the following:

  • Assuming authority – the email or phone call comes from a source you would trust
  • Playing on greed – it sounds too good to miss out on
  • Identity theft – stealing your personal details
  • Obtaining access – either by gaining key information or getting you to do their work for them
  • Phishing, smishing and vishing – duping an individual into handing over details by email, telephone or text message. 

Financial scams

The big investment scam

You’re contacted out of the blue with the offer of a big investment opportunity. It sounds like an amazing chance that you wouldn’t want to miss out on. But you’re told that you’ll need to move fast and invest if you want to be in on the big returns. Types of investments can include land banking, early pension release, unregulated markets, foreign exchange and binary options. Bitcoin investment is a new development in this area. 

Spotting the scam

There are 2 big flags for this one; does it seem too good to be true and are you being rushed? Take a step back and check if the firm is registered on the FCA website. The investment and firm may even be legitimate so be suspicious if you only have a mobile number or an email address doesn’t look quite right.

What’s a money mule?

It sounds harmless. You agree to have funds deposited in your account and then to move them on as directed. Essentially you’re money laundering and your role is known as a ‘money mule’. Young people are increasingly being targeted for this but any age might fall for it when it’s presented as helping out a new ‘friend’ or as a work from home scheme.

Spotting the scam

Be wary of anything that asks you to transfer money whether in the form of a new job, helping a chum or making an upfront payment to claim a prize. If payments made to you are in an odd form such as gift cards or vouchers then alarm bells should definitely be ringing.

What is a 419 scam?

Known as a 419 or advance payment scam, you’d easily spot this one when if it came from royalty overseas who want you to help them move money out of the country. Yes, you’ve been specially selected and you’ll supposedly get a cut for making an upfront payment. Another approach involves offering a job/loan/clairvoyant reading if you can just help out by making one or more upfront payments. Essentially you’re being asked to hand over money for access to a bigger sum of money or opportunity.

Spotting the scam

There are endless variations on this including cheque clearing, loans, recruitment and romance! Ask yourself if it’s usual to pay an upfront fee for whatever is on offer.

How do overpayment scams work?

This one is mainly aimed at businesses although it can sometimes be combined with aspects of the advance payment scam.  It involves a new customer who makes a big order, pays upfront and then requests a speedy refund. The original payment then fails to clear leaving you out of pocket. Individuals can be targeted if they are selling high price items such as cars. The failure of the payment to clear can them leave both out of pocket and without the sale item.

Spotting the scam

A sense of urgency from the ‘buyer’ can be a warning sign. Be wary around large upfront payments particularly by if they are by cheque or the payment method changes from that agreed. Don’t acquiesce to requests for refunds or release goods until the funds have cleared and are in your bank.

How did I get malware?

Scammers use various methods to get illicit software on your machine. In some cases, the badly spelt email from a bank you don’t have an account with is easy to spot. But it might not be that obvious. A malware insertion attempt could take the form of files from a colleague or supplier. Or a software update that you need to download in order to view a video on social media. Possibly a phone call claiming to come from your internet services provider alerting you to a fault. Once you’ve downloaded the malware them the scammer can record keystrokes and remotely control your pc.

Spotting the scam

Be suspicious of links or download requests of any kind. If in doubt don’t click on the link. If the communication claims to be from a company you have links with then contact them to check (and don’t use any of the contact details from the suspect message to do so).

Can chip cards be skimmed?

Financial scams aren’t just happening online and skimming is on the increase. Your card details can be stolen while you’re out and about. Your bank or credit card can be skimmed if you hand it over to anyone. This could be while making a payment or even giving it to a ‘friend’. Skimming picks up details from the magnetic strip. A scammer might also attach a device to a cash point to collect this information or trap your card and use a camera or false keypad to capture your PIN.

Spotting the scam

Try to avoid giving your card to anyone to take payment in another location. Suggest that you take the card to the payment device instead. Check cash points careful for anything odd looking. This might include parts of the cash point that are a different colour, scratches, and tape marks. Keep a careful eye on payments made on your card. Businesses need to keep an even more careful eye if there are multiple individuals authorised to spend against an account. Check transactions on a very regular basis to catch fraud early.

Counterfeit and fake goods scams

Door-to-door fraud

Legitimate businesses do sell door-to-door but it’s also an approach used by fraudsters. Goods or services that are offered are often poor quality or are never delivered at all. Also, watch out for surveys that are just an excuse to harvest personal information.

Spotting the scam

Urgency is often a giveaway. If they can’t wait then consider giving the offer a pass. Meanwhile, check out how legitimate the company is.

Fake goods

Scams involving goods are wide and varied. A recent example involved counterfeit Coronavirus tests being sold by a surveyor in one incident and a pharmacist in another. Variations on this can be online or in-person and might include event and concert tickets, holidays, goods offered on online shopping or auction sites and prizes. Either the goods will never be delivered or you’ll what you’ll receive is not what you were expecting. Items may be poor or a different thing altogether. In the case of prizes, you may be asked to pay an admin fee.

Businesses aren’t immune from fake goods and are at real risk of reputational damage if they sell them. They might also be targeted with fake requests for payments for business rates, data protection registration or advertising.

Spotting the scam

In many cases, goods or requests for payment can appear genuine and you won’t realise until inferior items are delivered (or fail to appear) that there’s a problem.  Apply the ‘too good to be true’ rule and check reviews. Businesses need to have robust systems in place for approving payments and checking suppliers prior to placing an order.

Property scams

It’s a scary thought that property can be remortgaged or even sold without your knowledge. It’s rare but it does happen. Properties that are rented, empty or mortgage-free are most at risk. Also watch out intercepted payments when making a payment or a deposit for a property. If you’re asked to change the account you’re sending the payment to at a later point in the proceeding be wary. Your email exchanges are likely being watched by a fraudster who is waiting for the right moment to make a move and divert the funds to their own account (before moving it on).

Spotting the scam

Protect your property by putting a restriction on the title and signing up for alerts of any changes from HM Land Registry. If you’re buying or leasing a property, particularly as a business, take precautions. Ensure that the property actually exists and the person leasing or selling it has the authority to do so. Be alert for any changes to payment methods and check by phone using a number you trust before proceeding to make a payment.

How do I know if I’m being scammed?

As scams change frequently and become more sophisticated you might not instantly spot that you’re dealing with a scammer. As a general rule always bear in mind that if it seems like an amazing deal or opportunity then you might benefit from applying some caution. Other ways to keep the fraudsters at bay include:

  • Keep a tight rein on expenses and statements and check them regularly
  • Don’t give personal details out and be wary of how you dispose of items containing them
  • Check sources for links, email addresses and phone numbers before you click or dial.
  • Be suspicious of anything that changes – payment methods, contact details 

What can you do if you get scammed?

If you’ve been the victim of a scam you need to act to protect yourself against further risk.

  • Change passwords
  • Check for malware
  • Report it to the police and your bank

With the huge range of scams taking place in the world today, it’s vital that everyone is vigilant to protect their property, businesses and other assets. Stay alert. As 2020 has shown every new development means new scams to combat.