Millions of households across the country are keeping a close eye on their spending habits this summer in an effort to stick to a budget to combat the ongoing rise in everyday living costs such as food, energy bills and petrol. Inflation soared again in June to yet another 40-year high of 9.4% and energy bills are predicted to go up from £1,971 to £3,245 in October, putting even more pressure on purse strings.
Financial pressure can make people vulnerable to scammers offering fake deals, goods or refunds which turn out to be clever ploys to obtain personal details and gain access to bank or savings accounts. Cifas, the UK’s leading fraud prevention service, has identified several scams specifically targeting consumers as a result of the cost of living crisis.
One of the most dangerous scams involves bank card refunds, where the fraudster claims they can help you get money back on things such as debit card purchases for an upfront fee.
Cifas explained that sadly this is a trick and the callous crooks are simply trying to harvest your personal and financial information, to then set up a device on your account which gives them full access to your bank account.
Cifas strongly advises everyone to think carefully before giving anyone online your personal details as it could open the door to all your financial information.
They said: “Remember to Stop, Challenge and Protect before you ever part with your personal and financial information and always talk to your bank if you are in difficulty rather than a third-party offering help on social media.”
A sentiment echoed by HSBC who recently revamped its free fraud and cyber awareness app, which is available for people to download regardless of whether they are customers.
The app provides warnings about new scams being spotted as well as information on recognising and reporting scams.
David Callington, HSBC UK's head of fraud, said: "We are able to give real-time warnings through push notifications, information and education, to help more people protect themselves and their hard-earned money from these criminals."
The bank also said more than 3.5 million customers have subscribed to its Voice ID technology, using their voice as their telephone banking password. Voice ID has identified 50,000 attempted telephone frauds since it was introduced in 2016.
HSBC UK highlighted the three most common scams it has seen across cards and payments in the six months from November 2021 to April 2022.
Purchase scams
Fraudsters tricking shoppers into paying in advance for goods or services that are never received was the most common type of scam by volume, according to HSBC UK's records.
The bank said it is noticing an increase in purchase scams involving falsely advertised vehicles online.
Some involve fake shipping websites that promise to look after funds for vehicles purchased abroad, and some advertise vehicles at well below market value to lure customers in.
Customers are then being convinced to purchase either by putting down deposits or outright payments.
Impersonation scams
Criminals may impersonate an organisation such as a bank, retailer or a utility provider.
HSBC UK said it is seeing a rising number of impersonation scams originating from calls from fraudsters posing as Amazon.
It is also seeing scammers impersonating HSBC UK's fraud team and calling customers to say their account is at risk.
Usually this is after the fraudster has sent a scam text impersonating another organisation - for example, Royal Mail - and requested a small payment which requires the customer to input their account details.
The fraudster tells the customer they need to move funds to a "safe account", which is usually an external bank account controlled by the fraudster or, increasingly, a crypto currency trading platform.
Investment scams
These often involve the purchase of fake bonds or cryptocurrency. HSBC said they incur bigger losses for its customers than any other type of scam - the average loss per case is £14,173.
A typical investment scam could start out with a message or call out of the blue about an investment opportunity that is "too good to miss", and contact can be made with the victim over months, sometimes years, to extract as much money as possible, HSBC UK said.
The bank said it is increasingly seeing scams that involve trading in genuine companies but through a fake intermediary. The victim can be shown an app or website listing their investments and returns, only to lose contact with the intermediary further down the line.
Commenting on the latest cost of living scam alert, Amber Burridge, Head of Fraud Intelligence at Cifas, said: “Criminals continue to use a variety of ways to take advantage of people struggling with the cost of living crisis. The sophistication of cyber-enabled attacks such as phishing and smishing continues to grow, and once criminals obtain someone’s personal and financial details, it’s likely they will be used to facilitate identity fraud, which accounted for over 60% of cases filed to the National Fraud Database last year.”
If you are ever asked to provide personal or financial information or supply your documents, then take a moment and think carefully about the consequences of parting with your details.
Remember that only criminals will try to rush or panic you into making a quick decision.
If you think you have fallen for a scam, contact your bank immediately and report it to Police Scotland by dialling 101.
To keep up to date with the most-read money stories, subscribe to our newsletter which goes out three times each week - sign up here .
