Types of scam

Scams can come in many different disguises, so it’s important to know the warning signs to look out for and what to do if you have, or think you have been targeted.

Phishing

An email scam where you appear to get a message from a legitimate source, such as your bank, HM Revenue and Customs, PayPal, Apple or Amazon.

The message will encourage you to click a link and log into your account, normally by telling you your account has been locked or there is a large transfer of money. In reality, the link in the email goes to a fake website which collects your information.

Another version of this scam involves an email attachment (perhaps a coupon or form you need to fill in), which is in fact a computer virus.

How to spot it

There are two main ways to spot a phishing scam:

  1. Look at how you’re addressed in the email. Scammers will use a general greeting such as Dear Sir, Dear Madam or Dear Customer. Legitimate emails will use your name.
  2. The email address the message has been sent from. Open the email and expand the pane at the top of the message and look at the email it was sent from. If it’s a real message it will come from a recognisable address (e.g. noreply@bank.com). Scammers will not be able to send messages from a real domain name, so the email addresses will be filled in with random letters or numbers (e.g. noreply@1234.bank.com), or have deliberate spelling mistakes.

What to do

Never click the links in a suspicious email. If you think there might be a legitimate problem with an account, go to the website directly and log in. This way you’ll never be caught out by a fake website.

Some organisations, such as HMRC, have an email address you can forward these emails on to, which helps them combat scams.

Find out more about phishing on the Action Fraud website.

Vishing

A phone call where the scammers pretend to be from your bank, building society or even a government agency.

During the phone call, the fraudsters will attempt to get you to reveal your personal details.

How to spot it

Very difficult. The big tip off here will be the caller will be desperately trying to get you to reveal your information, which no legitimate caller would ask you to do.

What to do

If you’re sure the call is fraudulent, just hang-up the phone. If you’re not sure, hang-up the phone and call your bank, building society on the number on your debit or credit card. This way you can be sure you’re going to the right people and if there is a problem, they can tell you about it.

Find out more about vishing on the Action Fraud website.

Investment scams

Generally a phone based scam, although you might be targeted in other ways, such as email or people coming round to your front door.

Although investment scams vary, the principle remains the same. You are encouraged to hand over money to invest in a company or product, which doesn’t really exist.

How to spot it

Can be quite difficult. Many of the companies the scammers are calling from or trying to get you to invest in can look legitimate, with websites, social media profiles and testimonials.

You should check the FCA register to see if the investor is regulated and Companies Houseto see if what they’re getting you to invest in exists.

Remember, it’s unlikely a company will contact you out of the blue about an investment opportunity. If you get an unexpected phone call, it’s best to ignore it.

A big warning sign should be if you’re told an investment offers a high rate of return with little risk.

What to do

Report to the FCA using their reporting form, or if you have lost money to suspected investment fraud, report it to Action Fraud on 0300 123 2040, or online at ActionFraud.police.uk.

Find out more about recognising and avoiding investment scams here.

Pension scams

Since the pension freedoms were introduced in 2015, retirees are able to access large sums of money from pension pots.

An unfortunate side-effect has been this group is now being targeted by scammers because they can potentially access large amounts of cash.

Pension scams will usually follow a similar path to investment scams, with contact normally being made by telephone.

How to spot it

Warning signs are similar to those for investment scams.

Unsolicited phone calls, or any unrequested contact, should be treated as suspicious. Anything involving high returns with low risk should ring alarm bells.

If you want to be sure, check the FCA register and Companies House.

What to do

Report to the FCA using their reporting form, or if you have lost money to suspected investment fraud, report it to Action Fraud on 0300 123 2040, or online at ActionFraud.police.uk.

Find out more about recognising and avoiding pension scams here.

Advance-fee fraud

Another kind of email scam, and probably the most well-known. You get an email from ex-ministers or the royal family, often from a country in Africa.

Normally, they will ask to use your bank account to deposit a large sum of money so they can get out of the country and offer to pay you a fee.

You’ll be asked for your bank details, but of course there is no money and the scammers will use the details you send to clear-out your bank account.

Similar schemes exist with wills and claiming an inheritance from a long-lost relative.

How to spot it

One of these times when you have to remember if it sounds too good to be true, then it probably is.

Again, it is worth checking the email as the name the message is from and the email will not match. Bad spelling and grammar can also be a give-away.

What to do

Ignore the email and never send payment details or personal information.

Find out more about Advance-fee fraud on the Action Fraud website.

Pharming

Similar to phishing, but instead of sending you an email directly, the scammers target the website you are visiting.

You type in the correct website address, but you then get directed to a fake version, where you inadvertently put in your login details and secure information.

How to spot it

You need to be very observant. As you’ve entered the correct web address, you would naturally assume you’ve gone to the real website. Scammers have also designed these fake websites to look just like the real thing.

Look at the website address. It will not show up as you’re expecting, but as a selection of numbers, or perhaps something similar to the real name, but with letters switched around or a different spelling.

What to do

Be observant when you’re logging into websites and be on the look-out for suspicious website addresses.

It’s also important to keep your operating system and anti-virus software up-to-date.

Find out more about pharming on the Norton Security website.

Smishing

Text message based scam. Scammers will contact you claiming to be from your bank saying you need to update your personal details, or there is some kind of issue.

The text might contain a link (like a phishing scam), or a phone number to call. The phone number is fake and, when you call, the fraudsters will attempt to get you to reveal your details.

How to spot it

Difficult to spot, so if you get a message like this be suspicious. One giveaway might be the phone number in the text is not the same as the one on your credit or debit card.

What to do

If in doubt, call the number on your card and find out if they have tried to contact you.

Don’t click any links in text messages. Always go directly to the website and login as normal.

Find out more about smishing on the Action Fraud website.

Computer software fraud

Scammers pretending to be from Apple or Microsoft contact you by phone or email and say they need your payment details to fix, update or validate your software.

How to spot it

It’s very unlikely computer companies would make an unrequested phone call about these kind of issues. Treat the calls with the same suspicion as you would treat any other unexpected call or email.

What to do

If in doubt, contact your computer or software supplier directly and never give out your payment details.

Find out more about computer software services fraud on the Action Fraud website.

Door to door scams

Can take many forms, but instead of relying on the anonymity of online communications, they simply knock on your door.

While they can be investment and pension scammers as well, they can also try and scam you in a more practical way – like selling you a product or service.

A common example is a person claiming to be a builder who happened to notice some damage to your roof when they were passing. Fake charity collectors and salespeople are other examples.

How to spot it

Always be suspicious of anyone arriving unannounced at your door. In the age of digital communications, it’s unlikely any legitimate company will attempt to do business this way.

It’s also important not to be fooled just because someone has identification. It’s very easy to make a fake ID and it’s no guarantee of legitimacy.

What to do

Do not engage with anyone who knocks on your door unannounced and anyone you suspect of trying to scam you or your neighbours should be reported to the police.

Find out more about door-to-door sales scams on the Action Fraud website.

Other 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.

Here, we take a look at some common scams which are harder to spot and prevent.

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.

Find out more about dating scams on the Action Fraud website.

Crash for cash

Simply put, this is when someone has a deliberate crash so they can claim on the insurance. In reality, it’s a lot more complicated.

Groups, usually criminal gangs, will target people who they think will have good car insurance, or who are less likely to put up a fuss, for example, mothers with children.

The scammers’ car will be in front of you and suddenly slam on its brakes, or unexpectedly pull out of a junction causing you to crash into them.

They will insist the crash was your fault, but be willing to hand over their insurance information.

A few weeks later your insurance company will tell you the details of the other drivers claim, which will exaggerate the costs such as car hire, or whiplash injuries.

Find out more about crash-for-cash and how to avoid it on The AA 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 might not be the real thing – if they even turn up at all.

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

Find out more about health scams on 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.

You might also get caught by a work at home scheme where you’re told you’ll make easy money and you might 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 might be sold on to other scammers.

Find out more about job scams on the Action Fraud 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.

Falling for this scam would actually mean you’re breaking the law by money laundering.

Find out more about money mules on the Action Fraud website.

Online auction scams

Con artists can pose as either fake buyers or fake sellers. If they buy from you they appear to pay for the goods, but as soon as you have sent it to them, the payment is withdrawn.

Fake sellers get you to buy non-existent products and simply disappear with your money.

For more information on other potential scams, check out the Action Fraud A-Z of fraudopens in new window.

Did you find this guide helpful?