The last month has seen the number of scam warnings issued by police, banks and financial regulators rise, as fraudsters prey on the cost-of-living crisis to target savers’ money.
‘Advance fee’ loans
Lloyds Bank is one of the institutions to warn individuals about ‘advance fee’ loan scams, which have seen the average victim lose around £231.
These types of scams take place when victims applying for a loan are asked to pay an upfront fee by fraudsters impersonating a legitimate lender.
According to new data, this type of fraudulent scheme has soared by more than 90 per cent this year, as fraudsters take advantage of individuals and businesses seeking out new finance to deal with rising costs.
This type of fraud has particularly been targeted at individuals who have a poor credit rating and have been refused other forms of borrowing.
The Financial Conduct Authority (FCA) has launched a ScamSmart campaign, after £25 million was lost to such scams between 1 January 2021 and 31 March 2022.
In this type of scam, fraudsters target victims online, by phone or if they are searching for investment opportunities and pretend to offer help.
They then ask savers to download screen sharing software, such as Microsoft Teams, AnyDesk, TeamViewer and Zoom, so that they can take control of their screen and access personal information to give them access to online banking.
Once they are in, they are free to clear out a victim’s savings, leaving them with little recourse to recover their money.
The FCA carried out research of 2,000 investors aged between 18 and 55 and found that while 91 per cent said they would never share their PIN with a stranger, 85 per cent did not think a request by a website to download software to be a red flag that someone was attempting to gain access to their personal information.
These are just two of the recently reported types of scams that are being conducted at the moment and there are many more fraudsters out there employing different techniques to acquire money illegally.
It is important that you seek independent advice if you are approached by an organisation offering loans or investments, even where you believe the communication to be legitimate.
The methods and technology employed by fraudsters are becoming increasingly advanced, which is why it is best to seek input from a trusted adviser.