Financial crime is estimated to cost the UK economy an unbelievable £190bn Link opens in a new window per year. And according to an article from The Guardian Link opens in a new window, UK victims lost £1.3bn in 2021 due to a surge in online fraud with authorised push payment fraud (scams involving someone tricking you into sending them money from your account) rising by almost 40% compared to 2020.
While fraud isn’t new – we’ve all had the suspicious emails and texts about orders we’ve never placed - some of these are getting increasingly harder to spot.
We spoke to Sam a Cyber Strategy Consultant and Miriam a Customer Support Training Manager from Virgin Money to find out more about the most common types of fraud and for tips on how you can stay safe against scams.
1. What are the main types of fraud people should be aware of?
This is one of the most common types of fraud. It’s when fraudsters send emails and messages impersonating trusted authorities and well-known brands.
Financial services brands are commonly impersonated because criminals can exploit people’s natural concerns for their money, but there’s also been fraud around the NHS, HMRC, parcel delivery firms, social media companies and other familiar organisations. Typically, the emails link to a fake log-in page and ask you to enter your username and password. Criminals will then use this to steal information or try the same password to access other things like your bank account (this is why you should never, ever recycle passwords!).
Unfortunately, there’s been a recent rise in online fraudsters targeting people in financial difficulty Link opens in a new window with messages sent via email and text promising energy and council tax rebates as well as encouraging people to apply for a “cost of living payment” and impersonating genuine government support packages. For help with the cost of living crisis, check out our Money on your mind Link opens in a new window section.
'Safe account’ fraud
Where a criminal contacts you pretending to be from law enforcement (police or national crime agency) or your bank and tells you they are conducting an investigation and need you to move your money. The ‘safe account’ is often held at a different bank.
This is usually done via cloned websites, which are hard to detect and are mirror images of their genuine counterparts. Crypto assets have also featured heavily. These are not a regulated investment product (even in legitimate circumstances) and are flooded with rogue traders and fake crypto exchanges.
Top tip, always check the firm and or individual you are dealing with is authorised and regulated by the Financial Conduct Authority Link opens in a new window before you do anything. Also, the FCA have a warning list of firms that they know are being fraudulent, check if an investment opportunity could be a scam using the ScamSmart tool Link opens in a new window.
People striking up fraudulent relationships with people through dating websites, Facebook, LinkedIn, even some online scrabble games. If you’ve watched Tinder Swindler then that’s a prime example of romance fraud!
Advertised goods that don’t exist and a fraudster asking for direct bank transfers via fast payments to secure items such as puppies, cars and even advances for rental properties.
2. Why has fraud risen so much in the past year?
Fraudsters target life events that are happening around the world and focus on these. The current cost of living crisis is having a huge impact on a lot of people in the UK and this causes an influx of new scams to crop up where people can easily fall victim. From energy rebates to government help schemes it’s easy to see why fraudsters have pounced to seize on this perfect storm.
3. What’s the difference between fraud and a scam?
The key difference is that a fraud can be with or without participation of the victim, whereas a scam more often involves the manipulation of the victim into doing something, like buying fake goods or sending money to a ‘safe account'.
Typically, with a fraud, victims are completely unaware they have been defrauded until their card stops working, or they notice an unusual debit from their account.
With a scam, the victim is normally caught up in a fake call from their bank, an investment opportunity, or the purchase of goods from a fraudulent or fake seller. With a scam, there is a greater amount of involvement of the victim as the criminals will do their best to get the victim to process the transaction themselves.
4. How can I spot scams and avoid them?
It’s important to understand that everything, and we mean everything, can be faked. Whether it is websites, text messages or online ads and social media profiles, criminals have the tools to make their copycats look professional. Forming good security habits to keep your information safe is the best way to avoid trouble from the outset:
- Think twice about any message or call that’s unexpected, especially if it makes worrying claims.
- Don’t be afraid to stop a conversation if you feel overwhelmed. Criminals know that if they say someone is stealing from your bank account, for example, it’ll cause panic, which is when people are more susceptible.
- Don’t click links in emails or texts unless you’re sure they are genuine. Virgin Money’s emails will never link to pages that ask for passwords or account details. It’s a good general rule to go to the site from the search engine if you need to log into an account.
Did you know? You can report scam texts of any kind by forwarding to 7726. This is a national service that most phone providers are part of to help ban malicious senders.
5. What are some of the cleverest scams you’ve seen recently?
1. Energy rebate – due to the cost of living crisis fraudsters are targeting customers claiming that they are eligible for a rebate. The reported scam emails claim that the recipient is due an energy rebate payment as part of a government scheme and provides links for the recipient to follow to apply for the rebate. The links in the emails or texts lead to malicious websites designed to steal personal and financial information.
2. Multi-stage scams - criminals are exploiting the personal information they get hold of and can link scams together to defraud the same victim multiple times. For example, parcel delivery text message scams are a common scam requesting payment of a few pounds to release a fictitious delivery. The victim then receives a subsequent call claiming to be their bank or law enforcement and requesting them to move their money to another bank to prevent fraud. During this call, the fraudsters will quote the victim’s personal and banking information that was obtained at the previous stage with the parcel delivery scam. The caller seemingly knowing everything about you can make the story appear genuine.
6. What are the tell-tale signs of bank account fraud?
Watch out for the following as the main signs:
- Being rushed into doing something
- Being told that your account is at risk or that you owe tax to HMRC
- Being told that your internet or bank account has been hacked or is at risk
- Being told to download software so the caller can assist you with a payment, refund or account set-up
- Being asked to read out codes sent via text message
- Being given a rationale to disregard scam warnings from your bank
- Being pressured in to sending money
- Receiving an electronic communication from either a personal or business contact providing a change of account details and requesting payment
7. What should I do if I think I've been a victim of fraud? What are my rights and where can I go for help?
If you think or suspect you have been the victim of fraud, your absolute first point of contact should be your bank, as they are the only people who can stop any more activity and start the process of recovering your money. If you notice anything unusual about your account or activity, contact your bank immediately using the number on the back of your card. Following this, you should report the incident to Action Fraud Link opens in a new window. Customers in Scotland should report fraud to Police Scotland on 101.
It’s difficult to set out specific rights as this will depend on the type of fraud suffered. Each report of fraud is assessed on a case-by-case basis by a specialist who is trained specifically to investigate that type of fraud with the vast majority of cases being fully refunded.
- Stop: Taking a moment to stop and think before parting with your money or information could keep you safe.
- Challenge: Could it be fake? It’s ok to reject, refuse or ignore any requests. Only criminals will try to rush or panic you.
- Protect: Contact your bank immediately if you think you’ve fallen for a scam and report it to Action Fraud.
If you’re a Virgin Money customer and need to report a phishing scam, you can email us at email@example.com
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