Warning – How to Avoid Financial Scams in 2020

By February 26, 2020Financial Planning
person with a headset adjusting the speaker while staring at a screen

It’s no secret that financial scams are becoming more sophisticated in 2020. Earlier in February, The Guardian ran a story about how one unfortunate retired couple who were conned out of £43,000, and who are still struggling to gain compensation (their banks are claiming the couple were negligent). In this particular case, the couple received a call from a scammer who claimed to be a bank fraud investigator insisting that their savings could be stolen. They instructed the couple to phone their bank using the number on their bank card. However, as the couple did so, the scammer was able to cleverly keep the line open and divert them to a fake call centre.

We sometimes encounter sad stories such as these, or “near misses” which could have resulted in financial disaster. So what can you do to protect your family finances against malicious activity? We offer this short guide to help.


#1 Be careful on public WiFi

It has been estimated that at least 594 million people across the globe have been victims of cybercrime. Much of this can be attributed to the rise of public WiFi, which most of us admittedly use due to its convenience (especially when abroad). However, many of these networks are unsecure and fail to have adequate encryption measures in place, allowing hackers to intercept your sensitive data if you log into your mobile banking or make an online purchase.

One way you can avoid this danger is simply to conduct these kinds of activities on your trusted mobile network, and not on public WiFi. Another option, however, especially if you have no access to data, is to connect using a secure virtual private network (VPN), which encrypts the connection to and from your mobile device, creating a secure “tunnel”.


#2 Beware of unsolicited calls

We frequently speak to people who have received suspicious calls about their savings or pension. This is particularly common amongst senior citizens, who are deemed by scammers to be more vulnerable and in possession of greater sums of wealth than younger people.

The first important thing to note is that since early 2019 there has been a UK ban on pension cold calling. So, if you receive a call about your pension from someone you do not know, it is a good idea to consider ending the conversation and notifying your financial adviser. This ban does not stop such calls from happening, of course, so it’s important to always be vigilant.

You could also insist on something in writing from the caller. In other words, tell unsolicited callers: “I never follow instructions from unannounced calls. Write to me so I have something to refer to.” If the person on the phone pushes you because the matter is “urgent” or because “utmost secrecy is required”, then take this to be a red flag.


#3 Paper shredding

Without thinking, many of us throw away receipts which contain details of our credit card or debit card number. This is often where identity theft starts, so it would be prudent to invest in a paper shredder. Also, keep a regular eye on your bank statements or mobile banking (using a secure connection) to monitor any suspicious activity.


#4 Keep software up to date

Many of us are also quite lax when it comes to updating our security and antivirus software for PCs and mobile devices. Be careful not to get into the habit of simply pressing the “later” button when an important app or firewall program prompts you for an update. Many scammers can exploit open holes within these protective layers of security, so it’s important to keep them closed.


#5 Browse carefully

The internet is a fantastic way to manage your wealth and finances, using online investment platforms and mobile banking. Be careful, nonetheless, to check carefully which websites you visit and ensure they are secure. One simple way to do this is to check the website address in your browser to make sure it starts with “HTTPS” (not HTTP), which helps to encrypt the connection between your computer/device and the website.

Also, be aware when using email, text and other messaging services such as WhatsApp. If an unknown company sends you a message with a link (e.g. to your Amazon or iTunes account), think twice before clicking on it. Quite often these are fraudulent links to fake websites, dressed up to look like the real thing.

Exercise caution with friends and family as social media profiles and email accounts can sometimes be hacked and send these kinds of messages. If you receive a message about a new sales offer, for instance, consider typing the web address separately into a trusted search engine to find it, rather than simply clicking on a link which might take you somewhere unsafe.

This content is for information purposes only. It does not constitute investment advice or financial advice. To receive bespoke, regulated advice regarding your own financial affairs, please get in touch to speak to one of our independent financial planners here at FAS.