3 shrewd ways to avoid an advanced financial scam this year 

16 January 2024

If you have never been the victim of a financial scam, it might be hard to imagine that it could happen to you. After all, if you are a financially savvy individual, you could believe that you would always know a scam when you see one. 

Unfortunately, financial scams are becoming increasingly prevalent – and increasingly intelligent too. While the rise of artificial intelligence (AI) and other forms of advanced technology are producing some positives in the world of finance, criminals are also using highly sophisticated digital programming to defraud individuals of their money. 

Indeed, according to research by NatWest Group, 7 in 10 UK adults were targeted by scammers in the year to October 2023, averaging around three attempts a week. Barclays also says that financial scams surged by 24% in Q2 2023 compared to the same quarter in 2022.

As a result, NatWest Group reveals that 63% of Brits feel apprehensive about their online safety, and 60% are worried about losing money to a scammer online.

And, perhaps most worryingly, the data shows that 13% of British people have already lost money to fraud, with 7% losing up to £5,000.

Keep reading to find out the most common types of digital scams in the UK today, and three ways to avoid falling prey to a financial criminal in 2024.

5 common types of digital financial scam in the UK

According to the NatWest Group research, these are the most common types of financial scam perpetrated in 2023, and the percentage of cases they make up.

1. Phishing scams (37%)

“Phishing” describes fake emails, phone calls, and text messages impersonating a person or organisation.

2. Trusted organisation scams (21%)

Here, criminals impersonate an organisation you would usually trust unquestioningly, like HMRC, the NHS, your bank or building society, or your energy provider.

3. Refund scams (13%)

Refund scammers will impersonate an organisation and let you know you are due a “refund” – for example, from your self-assessment tax return – and ask for your banking information.

4. Friend and family scams (12%)

In this type of scam, criminals impersonate close relatives or friends and may ask you for financial help. 

5. “Get rich quick” programmes (9%)

This usually comes in the form of an investment proposition that will promise high returns over a short time period. 

Sadly, according to Action Fraud, the cost of living crisis has made scammers even more successful. Energy rebate fraud, for instance, has become commonplace, leaving even the most vigilant individuals vulnerable to this criminal action.

3 ways to avoid an advanced financial scam this year

Now that you are aware of the types of crime you could be targeted with, let’s take a look at three practical ways to avoid even an advanced financial scam in 2024.

1. Be mindful of the source 

The source of the information or offer you receive from a scammer often gives away the fact that they are attempting to defraud you.

For example, if you are contacted out of the blue through the following sources, it’s highly unlikely that the offer is legitimate:

• Social media. According to an Independent report, Barclays data shows that 88% of purchase scams, which cause victims to lose an average of £1,000, start on social media. 
• Email. While legitimate businesses do contact clients and prospects using email, it’s highly unlikely that a financial professional would solicit a transaction out of the blue.
• Text message or WhatsApp. Friend and family scams often start on WhatsApp or over text. It’s important to look at whether the phone number being used belongs to your loved one. If the person claims they have “lost their phone” and are using another number, this is cause for concern. 

Remember: scammers can even use “deepfake” imagery to make an email or social media post look identical to a trusted company. 

So, before you act, ask yourself if this company is likely to solicit business using this method of communication, then follow the next two steps. 

2. Look for telltale red flags

If you are unsure whether something you see online or a message you receive is legitimate, it may help to look for these red flags:

• Promises of high returns over a short period
• Spelling mistakes
• Non-UK phone numbers
• Out-of-the blue requests for “urgent payment”, even from sources like HMRC
• Being pressured into decisions on a time limit.

Each of the above points could be a sign that something is not right. 

3. Speak to your financial planner

Not only can your financial planner help guide you towards positive financial habits, goals, and choices, but we can also help steer you away from harm.

For instance, if you were contacted by “HMRC” and told you were due a tax rebate, you could feel relieved and proceed with the instructions given. But before you do, it may be wise to contact your financial planner who can help ensure this offer of a refund is legitimate.

This way, your financial choices are backed by a seasoned expert who could help you avoid a costly mistake. 

Remember, some scammers specifically target those with large pension pots or significant invested wealth, and if you did fall victim to this kind of crime, it may not be possible to retrieve the funds you lose.

So, in the interest of safety, it may help to run any large transactions by your financial planner before going ahead.

Get in touch

Working with us could help to protect your wealth from harm. To speak with a financial planner, email info@depledgeswm.com or call 0161 8080200.

Please note

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