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A recent National Audit Office report laid bare the ugly truth about fraud in the UK, which accounted for 41% of all crimes against individuals recorded in the year to June 2022. The number of frauds and scams recorded have risen sharply over the last year, with the scams becoming ever-more sophisticated. Indeed, Office for National Statistics data shows that people are more likely to fall victim to fraud or cyber offences than any other crime.

Just last week, the Metropolitan Police reported that their detectives were beginning the mammoth task of contacting over 70,000 people they believe have been the victim of a banking scam. Posing as employees of major UK banks, fraudsters have cold called individuals to alert them to a supposed security breach on their account and asked them to access their account whilst on the phone, in doing so disclosing personal information allowing the scammers to clear out their accounts. Police have suggested that one individual has been scammed out of £3m.

Scams come in many forms

These reports are a timely reminder of the need to remain vigilant against fraud and scams, which come in various guises. Whilst frauds involving banking and credit remain the largest proportion of reported crimes, the biggest increase has been seen in consumer retail fraud and advance fee fraud. The latter is where scammers target victims to make upfront payments for goods or services that then do not materialise.

What can you do to protect yourself?

There are some common-sense steps you can take to help defend yourself against financial scammers. Firstly, you shouldn’t automatically trust an unexpected communication from your bank, H M Revenue and Customs or a company you’ve done business with. Always treat any unsolicited calls with suspicion, and do not confirm or provide your personal details or agree to transfer any money.

If you’ve been called by someone claiming to be from your bank, end the call and then phone the official bank number from a different phone. This is important, as scammers can keep the line open if you call back from the same phone.

You should also treat text messages or emails received from a bank or other service provider with suspicion, in particular if the text message asks you to click on an email link provided. The link could direct you to the scammers website, where your personal details can be collected. If in doubt, always log on to a website directly rather than clicking a link in an email.

You should always be wary of cold callers trying to sell you a product or service. Don’t allow yourself to feel rushed into making a financial decision, and always take time to think about whether to take up an offer. This will give you time to seek independent advice if needed.

If it is too good to be true…

Scams involving investments and pensions are also on the increase, and the fraudsters are using more sophisticated ways to make offers look and sound more plausible to unsuspected consumers. A good rule of thumb is that you should always reject any unsolicited contact offering you the opportunity to make an investment. The contact could come via a telephone call, email, post or by word of mouth, and may offer an investment that can provide unrealistic returns that sound too good to be true, or a need to urgently make an investment, as not taking up an offer would lose the potential investor a bonus or discount.

Beware of clones

The use of “cloning” is also becoming more prevalent. This is where the fraudster sets up a fake firm, using the name, address and other details of a legitimate financial firm. The scammer pretends to be calling from a legitimate firm and may try and use convincing language and provide links to the official firm’s website and literature, to make the potential victim feel more comfortable that they are dealing with a genuine firm.

Protect your pension

Scams involving pensions are particularly common. These generally involve cold-calls offering investment opportunities in high-risk investments, such as overseas property, forestry or other unregulated investments. Many of these offers will suggest that the individual needs to transfer their pension to the scammer to access the unregulated investments, and this is often accompanied by high pressure selling tactics employed by the fraudsters. Another potential scam is a call offering the ability for an individual to access or unlock their pension before the age of 55. Again, such a call is highly likely to be fraudulent.

Know who you are dealing with

Consumers can protect themselves from investment fraud by checking who they are dealing with. The Financial Conduct Authority (FCA) Financial Services Register lists details of firms and individuals who are authorised to provide investment and pension services. The FCA also provide a list of “cloned” firms on their website, where you can check whether a fake firm has been previously reported.

Don’t be a victim

Given the worrying upward trend in financial fraud, everyone needs to be vigilant to the risk of falling victim to a scam or fraud. Consumers should always treat unsolicited contact with a degree of caution, and you should always check who you are dealing with if you are contacted out of the blue. Trust your instinct, and if something feels suspicious, then report it to Action Fraud, the UK’s national reporting centre for fraud and cybercrime.

If you are interested in discussing the above further, please speak to one of our experienced advisers here.

The value of investments and the income they produce can fall as well as rise. You may get back less than you invested. Past performance is not a reliable indicator of future performance. Investing in stocks and shares should be regarded as a long term investment and should fit in with your overall attitude to risk and your financial circumstance.

There continues to be an alarming rise in financial scams since the first coronavirus lockdown. Here’s what you need to know about the different types of scam, and how to defend yourself.

In an effort to get around increased security measures from banks and other financial services firms, scammers are developing increasingly clever ways to persuade people to part with their personal details and even hand over their money themselves.

Impersonation frauds

One of the most popular ways is through something called ‘push payment fraud’. This occurs when the fraudster manages to convince the victim in ‘real-time’ to make a payment or transfer money from their bank account into another account controlled by the fraudster.

Here’s how this particular scam works. You receive a friendly phone call from someone claiming to represent your bank, HMRC, or a utility provider. The caller knows personal details about you, and the number they call from appears to be genuine (it could be the number on the back of your debit card, for example). The caller will tell you there has been some suspicious activity on your bank account – which means you need to open a new account and transfer all your money into it immediately.

In most instances, the first part of the fraud has already happened. Victims might have had their post intercepted or clicked on a ‘phishing’ email that handed over some of their financial or personal details to the scammer. That’s why they already know so much about you and your finances during the phone conversation.

A cunning confidence trick

The call is designed to make you feel anxious, or that you will be in trouble if you don’t take immediate action. It’s a psychological ploy, backed up with modern technology that convinces people the call is coming from a legitimate and trustworthy source. Before you know it, you’ve willingly handed over all of your money directly into the scammer’s account.

These impersonation scams were particularly prevalent during the early months of lockdown. Perhaps people were already more vulnerable than usual, had added money worries or scammers simply had more time to phish for people’s details and follow up with the impersonation part of the scam.

Investors need to be careful too

There are other impersonation scams out there to be aware of. The Financial Conduct Authority (FCA) has been warning people about the rise of “clone firms”, where criminals copy the names, websites, and literature from established investment companies and use them to target unsuspecting victims on sponsored links on search engines and through social media. Fraudsters will also ‘cold call’ investors directly, claiming to be from a company that the victim already has an investment with. In some instances, fraudsters have even set up email addresses in the names of actual staff members at investment management firms they are pretending to represent.

The fraudster will quickly gain the confidence of the investor and persuade them to make new investments or transfer existing investments. These new investments eventually turn out to be wildly over-priced, impossible to trade or they don’t even exist. Many investors only realise they have been conned when they contact the authentic investment firm to chase payments that haven’t arrived.

Pension freedoms have opened the door to fraudsters

Pensions have also become a target for criminal scams, especially since the introduction of pension freedoms that mean people can access their pensions early. People now have far more flexibility in what they do with their pension pot. For the fraudsters, this is an opportunity to get their hands on previously untapped wealth, and to rob people of their life savings.

The FCA and The Pensions Regulator estimated that more than £30 million had been lost in pension scams since 2017. Victims of pension scams, where fraudsters have managed to persuade the pension owner to transfer their pension to a fraudulent pension scheme, have lost an average of £91,000, and some unlucky victims have been robbed of more than £1 million of their hard-earned pension.

What can you do to protect yourself?

There are some common-sense steps you can take to help defend yourself against financial scammers. Here are some of the most useful ones to remember:

• Don’t automatically trust an unexpected communication from your bank, HMRC or a company you’ve done business with, and don’t ‘confirm’ your personal details or agree to transfer any money.
• Pay alert to messages from your bank or other service provider that ask you to click on an email link – they could be phishing for your personal details.
• If you’ve been called by someone claiming to be from your bank, end the call and then phone the official bank number from a different phone (scammers can keep the line open if you call back from the same phone).
• Reject ‘out of the blue’ investment offers, and remember that if something sounds too good to be true, it usually is.
• Be wary of cold callers trying to flatter you, pressure you, or scare you. Don’t allow yourself to feel rushed into making a financial decision.
• Trust your instinct. If something feels suspicious, report it.
• Always get professional financial advice between switching investments or making changes to your pension arrangements.

Summary

The Citizens Advice Bureau has repeatedly warned that the most vulnerable people are often at greater risk of being contacted by a scammer. But the reality is that these are sophisticated, ruthless criminals who go to great lengths to present themselves as genuine. It’s easy to be deceived, especially when the scammers know so much about you and are preying on your personal fears. But knowing how the fraudsters operate is an important first step to ensuring you don’t give them what they want.

You can report potential scams by calling ActionFraud on 0300 123 2040, or visiting actionfraud.police.co.uk

If you are interested in discussing the above with one of our experienced financial planners at FAS, please get in touch here.

This content is for information purposes only. It does not constitute investment advice or financial advice.

If you’ve been putting off making a Will, now might be the right time to put it back on your to-do list. Throughout November, Will Aid is helping thousands of people to get their Wills written professionally, while also contributing to several charitable causes.

According to research from Royal London published in 2018, 54% of UK adults haven’t made a Will, and a worryingly high 5.4 million people in the UK don’t know how to go about making one. There are several reasons most people give for not making a Will. Procrastination is the most common reason, with lots planning to make one ‘when they get older’. A large proportion of people without a Will simply seem to believe that they don’t need to make one –  either because they feel they have very little value to leave behind or they are confident their estate would end up where they intended it to without one. But this may prove to be a mistake.

What does a Will do?

Your Will gives you the opportunity to clearly state your wishes about what should happen to your money, your possessions, and your property after you die. It also allows you to name the person or people you want to be in charge of organising your estate after your death (called your ‘executor’), and lets you give them specific instructions on how to carry out your wishes. This could be anything from appointing legal guardians for your children, making gifts of your possessions to family and friends, making arrangements for your pets, and your specific requests for your funeral.

Why is having a Will important?

Writing a Will puts the control over your wishes in your hands. But it also removes most of the complexity that comes with sorting out a person’s estate after their death, which is a particularly difficult and stressful period at the best of times. Knowing that you have a Will already in place can give you and your family peace of mind that the process of dealing with your estate has already been taken care of. And leaving a Will that states clearly who should get your possessions and your property when you die can prevent unnecessary distress for your loved ones after you’ve gone.

Providing clarity on your financial affairs

Writing a Will is particularly important for anyone who has children or other family members that depend on you financially, or if you would like to leave some of your possessions to people who are not considered part of your immediate family.

Writing a Will can also make your financial affairs clear to the taxman, and help reduce the amount of inheritance tax that could otherwise be payable on the value of the property and money you leave behind. For example, by specifying you are leaving the family home to your children or grandchildren, your estate can claim the main residence nil-rate band, which would allow it to benefit from up to an additional £175,000 in tax-free allowances in the 2020-2021 tax year.

Life Interests

Leaving a Will can also be tremendously important in more complicated family circumstances. For example, you can use a Will to provide a ‘Life Interest’ – which can prevent unpleasant and expensive legal battles between your loved ones after your death. Creating a Life Interest is particularly important for people who have divorced and have children from their first marriage. With a Life Interest, the deceased can make sure their new partner is legally entitled to stay in their home while ensuring it will be passed on to the children as part of their inheritance.

What happens if you don’t write a Will?

If you die without leaving a valid Will, this is called ‘intestacy’ or ‘dying intestate’. This means that if you live in England or Wales (the rules are different in Scotland), everything you own will be shared out under standard intestacy rules. In other words, the law gets to make the decisions on who gets what from your estate. Here are some of the most common problems that can arise from letting the law decide:

• If you’re married, your husband or wife can inherit all of your estate even if you were separated at the time of your death. Your children might not get anything.
• If you’re unmarried, and not in a civil partnership, your partner will not be legally entitled to anything when you die, no matter how long you were together.
• If there is inheritance tax due on your estate, it could be significantly higher than necessary.
• If you have children or grandchildren, the amount they are entitled to may depend on where you live in the UK.
• If you die with no living close relatives, thanks to a law called bona vacantia, your entire estate could be handed to the Crown.

Stop putting it off

Some people worry about the costs involved with writing a Will, but in most cases it is not as expensive as you might think. And in November, you can arrange to have your Will written through Will Aid and make a charitable donation to several good causes at the same time.

What is Will Aid?

Will Aid is a partnership set up between the legal profession and nine of the UK’s best-loved charities. Since 1988, it has enabled helped raise more than £21 million for good causes, while ensuring that more people in the UK get peace of mind from having their Will professionally written. More than 500 solicitor firms nationwide took part in Will Aid last November, raising over £900,000 for charities working with some of the most vulnerable people in the UK and around the world.

How does Will Aid work?

Solicitors who are taking part in Will Aid will draw up a basic Will for clients without charging their usual fee. Instead, clients are invited to make a voluntary donation. The suggested donation is £100 for a single Will or £180 for couples. The donations are then given to nine of the UK’s biggest charities, including the NSPCC, Save The Children, Age UK, British Red Cross, and more.

Over the years, Will Aid has helped more than 300,000 people to put their financial affairs in order, make their last wishes known, and give them and their families peace of mind. If you would like to have your Will written through Will Aid, you can find your nearest participating solicitor and book an appointment on the Will Aid website.

There has been an alarming rise in financial scams since the coronavirus lockdown. Here’s what you need to know about the different types of scam, and how to defend yourself.

Rise of financial scams during lockdown

According to recent research published by Barclays, there was a 66% increase in reported financial scams during the first six months of this year. And, in an effort to get around increased security measures from banks and other financial services firms, scammers are developing increasingly clever ways to persuade people to part with their personal details and even hand over their money themselves.

Impersonation frauds

One of the most popular ways is through something called ‘push payment fraud’. This occurs when the fraudster manages to convince the victim in ‘real-time’ to make a payment or transfer money from their bank account into another account controlled by the fraudster.

Here’s how this particular scam works. You receive a friendly phone call from someone claiming to represent your bank, HMRC, or a utility provider. The caller knows personal details about you, and the number they call from appears to be genuine (it could be the number on the back of your debit card, for example). The caller will tell you there has been some suspicious activity on your bank account – which means you need to open a new account and transfer all your money into it immediately.

In most instances, the first part of the fraud has already happened. Victims might have had their post intercepted or clicked on a ‘phishing’ email that handed over some of their financial or personal details to the scammer. That’s why they already know so much about you and your finances during the phone conversation.

A cunning confidence trick

The call is designed to make you feel anxious, or that you will be in trouble if you don’t take immediate action. It’s a psychological ploy, backed up with modern technology that convinces people the call is coming from a legitimate and trustworthy source. Before you know it, you’ve willingly handed over all of your money directly into the scammer’s account.

These impersonation scams were particularly prevalent during the early months of lockdown. Perhaps people were already more vulnerable than usual, had added money worries or scammers simply had more time to phish for people’s details and follow up with the impersonation part of the scam.

Investors need to be careful too

There are other impersonation scams out there to be aware of. The Financial Conduct Authority (FCA) has been warning people about the rise of “clone firms”, where criminals copy the names, websites, and literature from established investment companies and use them to target unsuspecting victims on sponsored links on search engines and through social media. Fraudsters will also ‘cold call’ investors directly, claiming to be from a company that the victim already has an investment with. In some instances, fraudsters have even set up email addresses in the names of actual staff members at investment management firms they are pretending to represent.

The fraudster will quickly gain the confidence of the investor and persuade them to make new investments or transfer existing investments. These new investments eventually turn out to be wildly over-priced, impossible to trade or they don’t even exist. Many investors only realise they have been conned when they contact the authentic investment firm to chase payments that haven’t arrived.

Pension freedoms have opened the door to fraudsters

Pensions have also become a target for criminal scams, especially since the introduction of pension freedoms that mean people can access their pensions early. People now have far more flexibility in what they do with their pension pot. For the fraudsters, this is an opportunity to get their hands on previously untapped wealth, and to rob people of their life savings.

Last month, the FCA and The Pensions Regulator estimated that more than £30 million had been lost in pension scams since 2017. Victims of pension scams, where fraudsters have managed to persuade the pension owner to transfer their pension to a fraudulent pension scheme, have lost an average of £91,000, and some unlucky victims have been robbed of more than £1 million of their hard-earned pension.

What can you do to protect yourself?

There are some common-sense steps you can take to help defend yourself against financial scammers. Here are some of the most useful ones to remember:

• Don’t automatically trust an unexpected communication from your bank, HMRC or a company you’ve done business with, and don’t ‘confirm’ your personal details or agree to transfer any money.
• Pay alert to messages from your bank or other service provider that ask you to click on an email link – they could be phishing for your personal details.
• If you’ve been called by someone claiming to be from your bank, end the call and then phone the official bank number from a different phone (scammers can keep the line open if you call back from the same phone).
• Reject ‘out of the blue’ investment offers, and remember that if something sounds too good to be true, it usually is.
• Be wary of cold callers trying to flatter you, pressure you, or scare you. Don’t allow yourself to feel rushed into making a financial decision.
• Trust your instinct. If something feels suspicious, report it.
• Always get professional financial advice between switching investments or making changes to your pension arrangements.

Summary

The Citizens Advice Bureau warns that the most vulnerable people are often at greater risk of being contacted by a scammer. But the reality is that these are sophisticated, ruthless criminals who go to great lengths to present themselves as genuine. It’s easy to be deceived, especially when the scammers know so much about you and are preying on your personal fears. But knowing how the fraudsters operate is an important first step to ensuring you don’t give them what they want.

You can report potential scams by calling ActionFraud on 0300 123 2040, or visiting actionfraud.police.co.uk

If you are interested in discussing the above with one of our experienced financial planners at FAS, please get in touch here.

This content is for information purposes only. It does not constitute investment advice or financial advice.