A beginner’s guide to scams

Scams are getting more and more sophisticated so it pays to know what to look out for. Scammers can contact you over the phone, by email, by text, or might even show up on your doorstep. In this guide we look at some of the most common scams and explain how to stay safe.

How to spot a scam

Scams come in all shapes and sizes and are constantly changing and adapting. But you can usually avoid them by knowing what to look out for and playing it safe.

There are some general signs that should set alarm bells ringing wherever you see them.

If something sounds too good to be true, it probably is!

  • You get a call, text, email or letter out of the blue
  • You’re asked to give personal details or passwords – your bank will never ask for full passwords, or your PIN code
  • You’re pushed to make a quick decision – scammers don’t want to give you time to think
  • You’re asked to make an advance payment
  • You’ve never heard of the competition you’re told you’ve won
  • You’re told to keep it a secret
  • You’re promised something that sounds too good to be true

How to avoid being scammed

  • Don’t reply to suspicious letters received in the post
  • If you receive a suspicious phone call, hang up the phone and don’t give out any personal details
  • The same goes for suspicious emails – don’t reply and don’t click on strange links, or download attachments
  • If someone shows up and you suspect they aren’t from the company they say they work for, ask to see their ID
  • If you’re contacted by a company you’re not sure about, check if they’re legitimate. You can look them up on Companies House, or search for reviews online
  • Keep your online devices secure. Always use passwords and avoid sharing access with others
  • Choose your passwords carefully – use three random words and don’t re-use the same one for different accounts
  • Finally, always read the small print. Sometimes it’s hidden away for a reason

What to do if you think you’ve fallen victim to a scam

If you think you’ve been scammed there are three things you need to do:

  1. Stop sending money to the firm or individuals straight away. If you’ve shared any bank details call your bank and tell them immediately
  2. Report the scam. Contact Action Fraud, the UK’s national fraud and crime reporting centre, on 0300 123 2040, or use their online reporting tool
  3. Beware of a follow up scam. After you’ve been scammed you may be targeted by a different fraudster, claiming they can help you get your money back

Common scams and what to watch out for

Knowing about the common scams that fraudsters are trying to use to steal your money can stop you being conned. Here is a list of commons ones to watch out for.

You can find a series of short videos about the different types of scams on the Get Safe Online website.

Advance-fee fraud

This is also known as the ‘419 fraud’ or ‘Nigerian bank scam’.

You’ll receive emails from people claiming to be ex-ministers or royalty from other nations, often in Africa, asking if they can use your bank account to deposit a large sum of money in order to get it out of the country. They will normally offer to pay you a fee.

They’ll ask for your bank details and may also ask you to send money to cover legal fees and so on. But there is no money and you’ll be out of pocket. There is also a similar scam coming from China that’s related to wills.

More information about 419 emails and letters on the Action Fraud website

Chinese Letter Scam fraud alert from the Metropolitan Police Website

Boiler rooms

Also called ‘pump and dump’, this is a scam where fake stock market traders contact you out of the blue and give you the hard sell on buying shares that are either non-existent or virtually worthless.

You might be offered secret stock tips to make it all seem more believable and sent fake share certificates to try to make the business seem legitimate. Then the fraudsters will disappear with your money.

More about boiler room scams on the Action Fraud website

Dating fraud

Some fraudsters will connect with you on a dating website using a fake profile. They’ll be up-front about living overseas and will email you, getting to know you over time and becoming affectionate and romantic.

Then once you’ve become involved they will start asking for money for a sick relative or for a plane ticket to come and visit – and will happily take your money but never appear.

Face-to-face fraud

There are many legitimate door-to-door sales staff – but others don’t have good intentions. You can be pressured into buying something you don’t want or isn’t worth the money you pay for it.

Fraud by bogus tradespeople can take a variety of forms:

  • Fake charity collections
  • Selling you unfair or unsuitable contracts
  • Home maintenance or improvements that you are overcharged for or are badly done
  • Potential thieves who are checking out your valuables once inside your home

More about fraud by bogus tradesmen on the Action Fraud website

Health scams

If you see an email or an advert for a ‘miracle cure’ for baldness, cancer, impotence, acne or weight loss, then steer clear.

  • You could be offered something that appears to be a legitimate alternative medicine but doesn’t actually work
  • Or you might think you are getting drugs and medicines very cheaply or without a prescription but they may not be the real thing – if they actually turn up at all

In some cases these fake medicines can actually damage your health.

More about health scams from the Action Fraud website

Job scams

There are a variety of job scams which range from promises of a new career, where you’re asked to pay up front for training or materials, to being offered non-existent jobs abroad where you are then asked to pay a fee to organise visas and accommodation.

Advice on avoiding employment fraud from the Action Fraud website

You might also get caught by a work at home scheme where you are told you’ll make easy money and you may have to pay a fee up front to register. However, the ‘leads’ or products turn out to be worthless and – worse still – your registration details may be sold on to other scammers.

Working-from-home fraud alert from the Metropolitan Police website

Money Mules

Here you could unknowingly end up breaking the law and helping criminals by using your bank account to take delivery of, and then forward, stolen money and be paid a commission for helping. You would be breaking the law by money laundering.

More about money mules on the Action Fraud website

Online auction fraud

With the growth of online auction sites, there are con artists who will pose as fake buyers who appear to pay for the goods that you then send to them.

The problem is that the payment bounces. Or there could be fake sellers who take your money but don’t send the goods, or send something that’s less valuable or very different from the description.

Tips for buyers and sellers to avoid auction fraud from the Action Fraud website

Pension scams

Pension fraudsters will tell you they know a loophole so that you can get hold of some of your pension money before retirement. While you can make arrangements to get cash from it if you’re 55 or over, it’s likely to be a scam if you see claims that:

  • You can get cash before the age of 55
  • You can get more cash than under your current scheme, or
  • You can have more than 25% of the pension value “released”

They might charge you a fee or land you with a big tax bill.

See more about pension scams on the Financial Conduct Authority website

Pharming

This is when hackers re-direct the traffic from a genuine website to another, such as a fake e-commerce or banking site.

This is a very sneaky kind of attack as although you’ve entered the correct information to the right site, you’re still sent to a fake one to try to get your personal information.

Find out about pharming from Norton Security

More about dating fraud on the Action Fraud website

Phishing

Phishing is where someone tries to con you into revealing personal information like your bank account details.

A common trick is to send you a fake email pretending to be from your bank or another organisation you trust such as HM Revenue & Customs or PayPal, asking you to visit a website and log in with your account details. The site looks just like your bank’s website, but is really a fake site set up by criminals to get your details.

Email is the most common way of doing this, but you might be targeted by text message or by phone. If you’re suspicious, ask to call them back and see if the number matches your bank’s real phone number. Wait at least five minutes before calling back or, better still, call from another phone, just in case the scammer has stayed on the line.

More information about phishing on the Action Fraud Website

Prize draws, sweepstakes and lottery scams

You could get a letter or email telling you that you have won a lottery, sweepstake or other prize draw and offering you a large prize. The scam can then take different forms:

  • You might be asked to send a small amount of money in order to claim it as a processing fee or legal fee – but no prize exists and you lose the cash
  • You might be asked to prove your identity with a passport – which is then used by the crooks to steal your identity
  • You might be asked to provide your bank account details so they can pay the money in but this information is then used to clear out your account
  • You might be told you have won a prize and you need to ring a special phone number to claim it - the call goes to a premium rate number, takes ages and will cost you more than the value of the prize you’ve won

More about prize draw scams from the Action Fraud website

Property fraud

If someone offers you a get rich quick property scheme then there are a variety of ways they could be trying to defraud you.

  • You might be offered a way to buy into a development that is not yet built with all sorts of claims about the profits you’ll make – but the land is either farmland or derelict and will never get planning permission or is unsuitable for development so you’ll lose your money. This type of fraud is also sometimes called ‘landbanking’
  • A fraudster might steal the title deeds to a property and pretend to be the owner and then try to borrow money against the property

Find out more about the different kinds of property fraud on the Action Fraud website

Read about landbanking scams on the Financial Conduct Authority website

Telephone fraud and Vishing scams

A telephone or vishing scam is when fraudsters call you and try to get you to share personal information, passwords, or even try to make you authorise a bank transfer. They often do this by posing as bank representatives, or even the police.

Remember, your bank will never ask you for full passwords, PIN codes, or to transfer funds to another account.

In some cases a fraudster might pretend to represent your bank, will tell you your account has been compromised and will ask you to call them back on your bank’s real number. However, the scammer will stay on the line and intercept your call, so the information you think you’re giving to your bank is actually going to the fraudster.

If you think someone is trying to scam you over the phone, it’s best to hang up and not call back. However, if you do decide to call back:

  • Wait 10 minutes, or even better call back on a different line
  • Call back on an official number. For example, use the number on the back of your bank card

In July 2015, the Financial Ombudsman warned that in the majority of cases banks are not liable for loses due to vishing fraud.

Find out more about vishing on the Get Safe Online website.

Vehicle fraud

There are a number of scams around buying and selling cars.

You may be sold a stolen vehicle or a cloned car where the details of the car have been changed to match a legitimate vehicle. You could pay for a car that is never delivered to you or one that doesn’t match what you’ve paid for.

Advice on buying and selling vehicles safely from the Metropolitan Police website

More potential scams

There are plenty of other ways scammers might try to part you from your money. They might steal information from your social media accounts, through public Wi-Fi connections, or through various types of insurance fraud.