Avoiding the High Price of Financial Fraud and Scams

Managing money is difficult enough; the last thing you need is another financial challenge. Unfortunately, scammers and financial opportunists have different ideas about your finances; dishonest fraudsters are always at work devising new strategies to exploit UK consumers.

Financial scams and fraud are on the up, with creative new rip-offs coming to light every day. If money is at stake, you can be sure someone is scheming to take advantage of the situation, for ill-gotten gains. You may not be able to change human nature, but remaining mindful and diligent about financial scams can help protect you from scallywags.

Deceptive Cons

It is thought a substantial share of cybercrime goes unreported – perhaps most. Yet, according to the Economic Crime Directorate, the known cost of UK financial scams and consumer fraud approaches £52 billion annually. That’s a lot of money to account for, under any circumstances, but the impact is particular stark for families without deep cash reserves.

Loans are available online to help with urgent spending needs – even for applicants with a history of bad credit. But avoiding opportunistic scams and financial fraud is the best outcome for families living from payday to payday. Professionals are always on the case, fighting scams and fending off fraud, but it’s up to you to keep your guard up and protect yourself from opportunistic scam artists. FSCS recently warned of several prevalent scams impacting UK investors and consumers.

Boiler Room Schemes

The promise of attractive returns lures thousands of UK investors to boiler room schemes. Unfortunately the hollow scams yield nothing but headaches and big monetary losses; it isn’t uncommon for duped victims to lose thousands – even tens of thousands of pounds. Action Fraud crime prevention center estimates these scams may account for more than £1.7 billion.

The fraud starts innocently enough with an investment opportunity, commonly laid-out by phone. Most offers include an “urgency” feature, pressuring potential victims to act quickly, or lose the opportunity of a lifetime, collecting 40 percent returns. The Financial Conduct Authority doesn’t oversee boiler room schemes, so it can be difficult to recover money you handed over. The best defense against this type of scam is properly vetting firms you plan to patronise – before money changes hands.


The more information a criminal possesses, the higher probability they’ll find a way into your wallet. When scammers want more data, they go “phishing” for the information, typically posing as an official party or institution, in order to gain trusted access to user accounts. You may be asked to click an email link or verify account information.

With the right personal data, fraudsters are able to access banking and credit accounts, wreaking havoc on your financial life. Preventing phishing mishaps boils-down to information security. Your bank and other financial institutions will not solicit sensitive information via email, so contact requesting account information, passwords, and login details does not originate from a legitimate source.

Freebie Scams

Complementary introductory offers may be too good to be true. Fraudsters frequently use freebies to entice consumers into sharing card numbers and other financial information; a free introductory offer can quickly turn into a nightmare scam.

Though you’re made to believe there’s no charge for an offer, you may actually be authorising an unwanted subscription, resulting in repeat billing. Once you give the thumbs-up on “continuous authorised payments” recurring charges can be deducted from your account without additional consent. It can be hard to severe the agreements, so as a general rule, avoid sharing personal and financial details with anyone offering a free trial, requiring credit information.

Staying on top of your finances is already an ambitious undertaking; financial scams and fraud further complicate the process. Though new scams arise each day, most forms of fraud involve betrayed confidence. To avoid becoming a victim, never furnish trusted financial details to unknown sources – even if a request appears genuine. Instead, contact your bank or credit card company directly, and always report suspicious financial contacts.

Paul graduated in 2001 with a degree in Finance. Since then he has gone on to work for several of the UK's most well-known financial institutions.

An avid blogger and a huge football fan, Paul is here to guide you through the ins and outs of personal finance and perhaps save you some money in the process!

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