“Hi mum” – Here’s what you need to know about financial scams

woman reading impersonation scam text messages

Anyone could fall victim to financial scams, even if you are a savvy saver and investor. Read about common types of scams and how to keep your money safe.

Being the victim of a financial scam could be both costly and stressful – and sadly, the latest statistics paint a worrying picture.

Indeed, UK Finance reports that in 2023, criminals stole £1.17 billion from Brits through nearly 3 million cases of fraud.

While this is a 4% decrease from 2022, UK citizens are still at risk of falling victim to scams. Even if you feel you could spot the signs a mile away, the increasing digitisation of banking and finance could mean you are more and more vulnerable to this sort of crime.

Here, you’ll learn some of the most common types of fraud reported in recent years, plus how working with a financial planner could help to keep your money safe.

“Hi mum” impersonation scams play to victims’ vulnerabilities

Perhaps the most sinister type of scam you could experience are “Hi mum” or “friends and family” impersonation scams.

These happen when a criminal accesses your phone number or social media account and impersonates a loved one, such as your child or sibling. Usually, they will feign some sort of financial emergency and ask for the immediate transfer of funds.

According to Action Fraud, these criminals often infiltrate “large community or religious groups” through WhatsApp, with 268 cases being reported between January and July 2023. But they often target individuals too, so even if you aren’t in any large online groups, you could still be a victim.

What’s more, TSB reports that Meta-owned platforms, which include WhatsApp, Instagram, and Facebook, played host to 86% of impersonation fraud cases in 2022. WhatsApp constituted 65% of these.

If you receive an urgent message asking for funds, supposedly coming from a loved one, make sure to ask for:

  • Details that only the real person would know, such as the name of a childhood pet or friend
  • A phone call to confirm their identity.

These simple steps could help you avoid falling prey to this sort of financial crime.

The 3 most-reported financial scams in 2023

According to NatWest, more than 70% of adults reported being targeted by scammers in the 12 months to October 2023.

Here are the top three scams these individuals reported.

  1. Phishing scams made up 37% of reported crime

The National Cyber Security Centre describes phishing as “when attackers send scam emails (or text messages) that contain links to malicious websites”.

If you receive an email with an offer or deal on a product you particularly like, you might not hesitate to click on it. Following the steps to buy this product – especially on a smartphone, where site details aren’t as visible – could lead you to enter important personal details such as your credit card number or home address.

If the site is “malicious”, this means any details you enter could be stolen and used to take money from you.

  1. Trusted organisation fraud constituted 21% of scam reports

Trusted organisation scams are similar to impersonation fraud – but instead of pretending to be a loved one, these criminals impersonate organisations like a bank, investment platform, or even the NHS.

For instance, you could receive an email from “your bank” asking you to pay overdraft fees, and immediately follow the link to ensure you aren’t charged for late payment.

It’s normal to trust institutions that usually provide a safe home for your money – but unfortunately, scammers have become wise to this trust and may abuse it.

  1. Refund scams made up 13% of those reported

If you paid an Income Tax bill through self-assessment last year, you would likely jump at the chance of a tax rebate.

This is exactly what refund scammers rely on. Often posing as HMRC or another organisation such as an energy company, they will offer you a refund on a bill and steal from you when you provide your details.

In addition to these top three, there are more types of scam you should be aware of. These include:

  • Pension transfer scams, through which a criminal will offer you “better returns” or “early access” to your pension pot. Sadly, some cases of pension transfer fraud have caused individuals to lose their entire retirement fund.
  • Investment fraud, when an unauthorised person convinces you to invest in a fake asset using an unsecure platform, often leading to this money being stolen.
  • Life insurance or other protection scams, which could tell you that you’re a beneficiary of someone’s policy, or that there is a “problem with your policy”.

Being extremely cautious around unsolicited offers like these could help you to protect your wealth.

Contact the police if you believe you’ve been targeted by scammers

Financial crime is very serious, and although we could help you avoid falling victim to it (more on this in the next section), it’s important to know what to do if you have already been targeted.

No matter how big or small the case is, the first step to resolving financial crime is to contact the police straight away. If you’ve already parted ways with money, it is wise to immediately speak with the relevant authorities who might be able to help you retrieve the funds.

Your Kellands financial planner could help you avoid costly scams

Financial planning could help you protect your wealth from potentially devastating financial losses.

Your Kellands financial planner can:

  • Check the legitimacy of any organisation or individual who has offered you a financial product or deal
  • Manage your pensions, investments, and protection on your behalf, so you know your money is under the guardianship of a professional
  • Educate you on the ever-developing strategies that financial criminals use to target their victims
  • Work with you, any relevant providers, and the authorities if you have already lost money to a financial scam.

Email us at hale@kelland.co.uk, or call 0161 929 8838, to speak to a financial planner.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

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