Five scams to watch out for in 2022 – Forbes Advisor UK

As the UK grapples with its cost of living crisis, scammers are taking advantage of people’s heightened financial vulnerability.

Between July 1, 2021 and June 30, 2022, a case of fraud was reported to Action Fraud every 85 seconds, with total losses amounting to over £3 billion.

A total of 370,310 individual cases have been reported, each resulting in average losses of £8,1001.

In June, Citizens Advice warned that more than three quarters of UK adults had been targeted by a scam in 2022, a 14% increase on the same period last year.

With the day-to-day cost of living rising, scammers are likely to target those in trouble, with schemes ranging from impersonating energy market regulator Ofgem to offering bogus advice in retirement.

Below are five common scams in 2022.

Ofgem imitators

The UK’s fraud reporting centre, ActionFraud, has warned energy customers of a scam involving messages claiming to be from energy regulator Ofgem.

These bogus emails and text messages direct customers to an impersonated version of the Ofgem website, where they are asked to provide bank details to receive the government’s £400 energy rebate.

Ofgem says it never asks for details by email or text message, and asks any customer who receives this message to report it.

Myron Jobson, Senior Personal Finance Analyst at Interactive Investor, said: “It is important to be extremely vigilant and wary of scams when rolling out various government cost-of-living support programs.

“As we have seen during the pandemic, there are no depths to which unscrupulous individuals will not sink to swindle money from unsuspecting victims.”

Email invoices and online payments

According to a survey by the Nationwide Building Society, 24% of adults have been targeted by an email bill scam. During these scams, the scammers intercept genuine invoices via email and alter the payment details so that the customer’s money is diverted to them.

The Nationwide survey, which collected responses from 3,002 UK adults, also found that 35% of people were unaware that genuine e-bills could be intercepted in this way. The average victim of these scams lost £8,500.

To avoid this type of scam, Ed Fisher, Nationwide’s anti-fraud policy manager, recommends confirming payment details with the merchant you want to pay: “Call the merchant on a number you know is his and check the account details. If anything in the header of the email looks odd, don’t send the money.”

Online shopping is another popular avenue for fraudsters. According to research by Outseer, a payment fraud software provider, UK businesses and consumers reported 72,822 cases of online shopping fraud between June 2021 and July 2022.

In an online shopping scam, criminals pose as trusted online retailers or legitimate sellers on auction sites such as eBay.

They lure customers with extreme offers and discounts to sell counterfeit or non-existent products.

Ghost brokers

City of London Police have warned young drivers of the ongoing threat from ‘ghost brokers’ – scammers who sell invalid car insurance policies at unrealistic prices.

After making a sale, scammers send their victims fake insurance documents or take out a real policy but falsify details such as the driver’s age, address and history to lower the premium.

Most victims of ghost brokers don’t realize they’ve been scammed until they need to make a claim on the insurance policy.

Ben Fletcher, director of the Insurance Fraud Bureau (IFB), said: “Young and vulnerable people are constantly being targeted online with bogus car insurance offers that are too good to be true, and if they fall in love with them, they are immediately excluded. the pockets and the face to see their car seized by the police without insurance.

“The cost of living crisis means it has never been more important for people to protect their personal finances from fraud.”

Ghost brokers tend to solicit victims via social media or word of mouth, so when you need to purchase a car insurance policy, be sure to use a reputable comparison site or broker, or go to directly to the supplier.

Crash for money

According to the IFB, so-called “crash for cash” scams – in which scammers deliberately cause collisions in order to make fraudulent insurance claims – have also spread.

The most common tactic used by these scammers is to slam the brakes at busy intersections, causing the driver behind to collide with their vehicle.

Tom Hill, Detective Chief Inspector of the City of London Police’s Insurance Fraud Department, said: “As we have seen in the past, an increase in the cost of living and the Resulting financial difficulties can often cause people to commit fraud. Unfortunately, that means the public has to be even more alert than usual to fraudsters, like “Crash for Cash” drivers.

To avoid such scams, the IFB recommends maintaining a good distance from the vehicle in front of you when driving and being on the lookout for erratic drivers.

If you think you or someone you know has been the victim of a cash scam, you can report it to the IFB.

Retirement scams

Savers are also at increased risk of being targeted by scammers amid the cost of living crisis, the pensions regulator has warned.

As rising inflation eats away at the value of savings, fraudsters attempt to persuade savers to withdraw a portion of their pension fund, which the scammer promises to reinvest for higher returns.

Tom Selby, head of pension policy at AJ Bell, said: “Unscrupulous fraudsters will try to take advantage of the vulnerability in any way possible, from offering ‘early access’ to pensions to promotion of dubious investments promising exorbitant guaranteed returns.

“Offers like these could be particularly tempting for people facing inflation on the edge of double digits.”

To avoid these scams, Mr Selby advises to hang up on anyone who contacts you uninvited to discuss a “pension review”, to deal only with FCA-regulated financial advisers and to be wary of anyone offering “guaranteed” returns on investment.

It’s important to keep in mind that if you’re under 55, it’s almost never in your best interest to withdraw your pension.

Unless you’re too sick to work, have been diagnosed with a terminal illness, or have a “protected retirement date” that states you can retire before age 55, you’ll be hit with a 55% tax bill on the withdrawal.

Tips to avoid scams

Virtually anyone can fall victim to a scam. According to Outseer’s analysis, men and women are equally likely to be victimized, and scams are reported across all age groups.

Those aged 20 to 39 reported the most cases of fraud (about 125,800 cases), while those over 80 reported the least (about 13,700 cases). However, those in higher age groups who reported scams tend to lose more money.

Mark Crichton, Chief Product Officer at Outseer, said: “There is no profile of a typical fraud victim – every business and every consumer is at risk. And for those who fight against fraud, it is not useful that there remains a perceived “image” of a victim. »

To avoid falling victim to one of these scams, Citizens Advice suggests looking out for the main warning signs:

  • An offer seems too good to be true. Scammers lure consumers with promises of cheap deals or high returns. If something sounds too good to be true, warns Citizens Advice, it probably is.
  • The communications do not seem authentic. It is common for scammers to impersonate legitimate organizations such as energy companies or government agencies. If in doubt, contact the company directly to verify if the communication is from them.
  • We urge you to act quickly. One tactic used by scammers is to pressure their victims to act quickly, with promises of time-limited deals or warnings of negative consequences if no action is taken. If you are asked to transfer money or provide personal information urgently, you may be the target of a scam.
  • You are asked to use an unusual payment method. If an organization you’ve dealt with in the past asks you to pay in a new way, such as transferring money to an account you don’t recognize or using a new payment link, the request may not not be legitimate.
  • Personal information has been requested from you. If you receive an email or text asking for information such as a PIN or password, do not provide your contact information. Genuine companies will not ask you to text or email this information.

If you have any doubts about the legitimacy of an email or text message, contact the company directly from which the message claims to come. Make sure to get in touch using the organization’s official channels rather than the details provided in the suspicious message.

Jane Parsons, consumer expert at Citizens Advice, says: “With the rise in scams, it is important for all of us to take steps to protect ourselves and others from scams.

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