Financial Scams Pose a Real Threat

As if you don’t already have enough financial worries to grapple with, illegitimate money schemes present another concern, which can interfere with your financial health. Financial scams are nothing new, but as monetary relationships grow more complex and automated systems pose security flaws, creative criminals are only one step behind the latest technology, devising new methods to steal data and cash.

If you don’t think your personal information and money are at risk, there are plenty of examples from recent history, which tell another story. From exploiting credit card processing glitches to orchestrating massive data security breaches, financial scammers are diligent, exposing consumers to an ever-changing array of underhanded financial tactics.

The best ways to avoid falling victim to scams is staying informed and learning what to look for when conducting financial business. If you have already become prey to the capable criminals perpetuating these scams, don’t be overly hard on yourself. The sophisticated schemes are often very hard to detect; there’s no point lingering over a mistake. Instead, look forward and use these tips to identify and avoid future financial scams.

Convincing Schemes Can Be Hard to Recognise

Personal experience goes a long way helping consumers identify financial scams. Unfortunately, learning this lesson the hard way can result in various financial problems, ranging from cash losses to damaged credit. Once you’re affected, the impacts of scams can be hard to correct, so it’s better to learn the warning signs and avoid scams altogether, before paying a financial price.

Phishing – Among the most common scams sweeping the UK, phishing is used to gather information from would-be victims. Each scam takes its own form, but phishing usually involves posing as an authority in an attempt to extract private information from a trusting individual. Scammers commonly use this approach to gain access to financial accounts and steal money from unsuspecting victims.

If you are targeted by a phishing scam, you may receive an email displaying some of the hallmarks of a legitimate communication. You may think the mail is from your building society or credit card company, but upon further inspection, a phishing effort can usually be exposed as a scam. If you voluntarily disclose sensitive information, which is later used to steal money from your account; it can be hard to get your money back. Unless you have an established pattern of communication with a financial institution, it is never a good idea to share account numbers and/or personal information online.

Illegitimate Lending – Fast funding is available, even without a formal credit check, but the only way to know you’re doing business with a legitimate lender is to compare providers side-by-side. Evaluating various lenders in this manner not only ensures the best interest rates and repayment terms for your loan, but it also provides direct feedback from prior customers, detailing their experiences with lenders.

Pension Scams – If you’re over the age of 55, another group of scammers may have you in their sights. A recent surge in the number of reports indicates Britons approaching retirement age are increasingly targeted by people running pension scams. Since pension freedoms were introduced, scammers have focused on aging investors, offering pension opportunities. In fact, it is thought as many as a third of those over age 55 have already been contacted by potentially dangerous financial scam artists. The illegitimate pension offers may arrive by post, email, or bold scammers may contact you directly, by telephone.

With a large number of legitimate financial concerns to juggle, a money scam is the last thing you need complicating your finances. From bogus pension practices to phishing schemes that give criminals access to your accounts, financial scams are a real worry. Although the schemes can be hard to discern, learning some of the warning signs can help keep you safe from financial distress. Start by guarding your personal information and always do your homework before making financial commitments.

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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