Types of scam and how to avoid them

Falling victim to a scam can be devastating, both financially and emotionally.

Unfortunately, fraudsters are constantly coming up with ways to try to part us from our cash, and often appear totally credible. Many have used the pandemic to devise new kinds of scams and you can read more about those in our article Coronavirus scams to watch out for.

Here’s our rundown of some of the different types of scams currently doing the rounds, and what you can do about them.

Investment/ financial scams

Between September 2019 and September 2020, Action Fraud, which is the national reporting centre for fraud and scams, received just over 17,000 reports of investment fraud, amounting to £657.4m in reported losses – a 28% increase when compared to the same period last year. Be very wary if you’re contacted about a financial opportunity or investment that looks too good to be true – here are some to look out for.

Scam HMRC text message promising cash

One scam text message currently circulating claims to be from HMRC and says the taxman is issuing you with a tax refund. It then asks you to tap a link so that you can claim the payment. To do this, you must enter your banking details, which are then used to steal money from you.

What you can do: Never click on any link, even if it looks authentic, or give out your bank details if requested by an email or text message. Instead, contact the organisation involved directly and see whether they have contacted you. You can report suspected phishing or spam texts to your mobile network provider by forwarding them to 7726. Make sure you’ve installed the latest software and app updates to protect your devices from the latest threats too. Find out how to do this here.

‘Suspicious activity on your account’ scam

You get a call or text message from someone pretending to be from your bank telling you there’s been some suspicious activity on your account, which they will tell you has been frozen. They will ask for your banking details supposedly to confirm your identity and resolve the problem, but use these to steal from you.

What you can do: Banks will never ask you for your PIN number or your online banking passwords, nor will they ask you to email or text your banking details, so hang up immediately if someone asks you for this information.

If you want to check whether it really is your bank contacting you, end the call and telephone your bank from another phone number, as sometimes scammers will stay on the line, so that when you redial what you think is your bank, they reconnect with you.

Early access to your pension

Scammers will contact you offering you a ‘loan’, ‘savings advance’ or ‘cashback’ from your pension. They will usually tell you that you’re free to access your retirement savings before the age of 55, but if you do this, you’ll not only have to pay a hefty tax charge, at least 55% but sometimes as much as 70% of your pension pot, but you’ll also have fees taken from your pension for the transfer, which can be 20% or more of your pension savings.

What you can do: Remember that 55 is the earliest age you can take your pension benefits. If you have a regulated financial adviser, speak with them in the first instance if you need help with your pension or are wondering if you should access your retirement savings. If you don’t have an adviser, the government-supported Pensions Advisory Service provides free independent and impartial information and guidance. If you’re aged 50 or over, you can also speak with Pension Wise on the phone, another government supported resource who offer free and impartial guidance about your pension options.

Loan fee fraud

Loan fee fraud is an increasingly common scam which is reported to the Financial Conduct Authority (FCA), with people losing £220 each on average.

The ‘loan provider’ will tell you that your loan is approved and then ask you to pay an upfront fee before the loan amount can be released. They then take the payment but never provide you with the loan.

What you can do: Always be wary of unsolicited approaches about loans and don’t click on links offering them. It’s also highly unusual to be asked to make a payment to a lender, before you’ve been given a loan. If you’re considering taking out a loan from a company you’ve never heard of, check the FCA Register to check the company you’re dealing with is authorised and stay well clear if it’s not.

‘Get rich quick’ schemes

You’ll usually be cold-called or receive a letter promising generous returns from supposedly lucrative investments, such as diamonds or forestry. The golden rule with investing is that if it looks too good to be true, it almost certainly is, so steer clear of anyone promising you’ll be able to get rich quick. If you’re considering investing in anything, always take your time to verify and validate the investment and remember that legitimate organisations won’t push you into making a decision – the financial services regulator doesn’t allow them to.

What you can do: Check the FCA Register to see if the company you’re dealing with is regulated. If not, they may be on the FCA’s Warning List of companies offering investment opportunities which are a scam. If the company is on this list, or you suspect they are trying to scam you, you should report it to Action Fraud either online or by calling 0300 123 2040.

Charitable donation scams

Almost £350,000 of charitable donations ended up in the pockets of criminals over the festive period alone last year, according to Action Fraud, which is urging donors to be on their guard before handing over their cash.

Gerald Oppenheim, chief executive of the Fundraising Regulator, said: “Fundraising this Christmas takes on a greater importance after a tough time for so many, including charities whose public fundraising activities have been paused for much of 2020. Unfortunately, there are a small number of people who may try to take advantage of your festive goodwill, and direct donations away from legitimate charities.

“Whilst we encourage donors to keep giving, it is essential that you remain alert and aware for any unusual activity when making a donation. Be sure to carry out a few important checks before giving. This includes checking to see if the charity is registered with the Fundraising Regulator, which means they are committed to maintaining good fundraising practice.”

What you can do: Never click on the links or attachments in suspicious emails or respond to messages which ask for your personal or financial details. You can find out if a charity is registered with the Fundraising Regulator here and you can check the charity’s name and registration number at Gov.uk.

Shopping scams

Figures from Action Fraud show that criminals conned 17,405 shoppers out of almost £13.5 million over the Christmas period last year, an increase of over 20% when compared to the same period in 2018, so be on your guard when buying online. Here are some of the shopping scams to watch out for.

Fake websites

Unfortunately there are always plenty of fraudsters operating fake shopping websites designed to part you from your cash, so make sure you’re on your guard when buying online. These sites try to pass themselves off as the real thing, so you’ll order and pay for items which then never arrive.

You should only ever buy from websites with ‘https’ preceding the website address, as this means the site is a secure connection. If it’s a retailer you haven’t heard of, check customer reviews on sites such as Trust Pilot to get an idea of whether they are reputable and trustworthy.

You should also make sure you choose strong passwords for any shopping site where you’re signing up for an account or providing credit card details. Ideally you should choose a combination of upper and lower case letter, numbers and special characters and make sure you choose a different password for each account you set up. Using different passwords for each account means that if one retailer suffers a data breach and usernames and passwords fall into fraudsters hands, your passwords with other websites remain safe.

What you can do: If you’re not sure whether a website is real or fake, get in touch with the retailer directly and check you’ve got the right URL. If you think you’ve fallen victim to an online shopping fraud, get in touch with your bank immediately and see if they can stop your transaction. If you have been defrauded or experienced cyber-crime you should report it to Action Fraud either online or by calling 0300 123 2040 so they can monitor reports of fraud and act quickly to stop it. 

DPD scam

Recently there’s been a spate of scam text messages and emails sent out, purporting to be from delivery company DPD. The message says something along the lines that you’ve missed a delivery, or an additional fee is payable if you want the parcel to be delivered. You’re then directed to a fraudulent site which requests personal information such as your address or payment details.

DPD says that fake or scam emails are nearly always sent from a private email address and not from an official DPD one. Often they are forged and look different from a dpd.co.uk, dpdlocal.co.uk or dpdgroup.co.uk address. If you’re in doubt, don’t click on any suspicious links and check whether you’re actually expecting a parcel.

What you can do: If you think you’ve received a fraudulent message which is pretending to be from DPD, you can report it at [email protected]

Amazon scam

There’s been a rise in fake automated phone calls purporting to be from Amazon, telling customers their Prime subscription is due to expire, and that payment will be automatically taken from their account to renew it.

The recorded message then asks you to press one to cancel or two to speak to customer services. The call then goes through to an individual who ‘requires’ your personal details to access your account and will use this information to take money from your account. There are a number of variations on this scam being reported, including for example an automated fake call from Amazon saying your £500 Iphone is being shipped, please press one to cancel or two to speak to customer services.

What you can do: If you receive an automated voice recording pretending to be from Amazon, simply hang up and report it both to Action Fraud and Amazon.

Job-related scams

Scams against job seekers are becoming increasingly common, and as with most scams, the fraudsters can often appear highly credible. They may put pressure on you to act quickly or pretend they know who you are and that they’ve found the perfect job opportunity for you.

There are several types of employment fraud out there, but here are three common scams to be aware of:

  • Fake job offers, advising you that you need to pay for security checks, online training, visas or insurance upfront
  • Requests for you to call a premium rate phone number for an interview, racking up hundreds of pounds of call charges when there is no interview, or vacancy
  • Work-from-home scams, which essentially con you into money laundering.

You should never pay any money up-front, or call a company for an interview. If it doesn’t feel right, the chances are it isn’t.

What you can do: To find out more about employment scams or to report a scam, visit the website Safer Jobs, a non-profit organisation created by the Metropolitan Police to raise awareness of, and to combat job and employment- related fraud. If you’re ever suspicious about any job advert or contact related to Rest Less, please email us on [email protected] right away and we will investigate as a matter of priority.

Computer service software fraud

More than 2,000 reports of computer service software fraud were made to Action Fraud in November 2020, with victims losing a total of £2,148,976, a 22% increase in reporting compared to the previous month.

Victims of computer service software fraud typically receive a call from a well-known broadband provider, who claims there is an issue with their service which they are going to resolve.

The caller talks you through the supposed problem and asks you to log on to your computer or mobile and connect via a Remote Access Tool, which means they can then access your device. Some reports also state that fraudsters have been using browser pop up windows to make contact with victims.

You’re then either persuaded to log into their online banking to make a payment for the service you’ve supposedly received, or you’re told you need to log in so you can receive a refund from the broadband provider as a form of compensation. This enables the scammer to then transfer money from your account.

What you can do: You should never install any software, or provide anyone who has cold-called you with remote access to your computer. If you’ve already done this, seek technical support to remove any unwanted software. If you need tech advice, look for reviews online first or ask friends for recommendations. If you think you’ve been a victim of fraud, report it to Action Fraud.

Who to contact if you’re a victim of fraud

Contact your bank immediately if you think you’ve fallen for a scam.

If you have been defrauded or experienced cyber-crime you must report it to Action Fraud either online or by calling 0300 123 2040.

You should also report what’s happened to the Financial Conduct Authority either online or by telephoning 0800 111 6768.

Help with the emotional impact of fraud

Falling victim to fraud can have a huge emotional impact. Victims often feel embarrassed and don’t want to tell people what’s happened, even though they are not to blame.

If you need to talk to someone about how you’re feeling, contact Victim Support either online or via their support line on 0808 1689111, or Think Jessica, a charity committed to protecting older people from fraud and scams. You can also contact The Samaritans at any time of the day or night on 116 123.

If a scam has left you struggling financially, contact Citizens Advice to help you find a way forward. You can speak to an adviser through its national phone service Adviceline, on 03444 111 444, which is available from 9am to 5pm Monday to Friday.

Have you been targeted by any of these scams, or are you aware of any other scams doing the rounds? Join the money discussion on the Rest Less community or leave a comment below.

Links with an * by them are affiliate links which help Rest Less stay free to use as they can result in a payment or benefit to us. You can read more on how we make money here.

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13 thoughts on “Types of scam and how to avoid them

  1. Avatar
    Dr. Miles on Reply

    I keep receiving a pyramid scam whilst on You Tube re making tens or even hundreds of £000s. I want to submit this scam to You Tube but do not know what to do. Help please.

  2. Avatar
    Ian on Reply

    The DPD and HMRC frauds you talk about have both been tried on us. I also have had emails and texts, neither of which would take a reply (which was going to be rude) along with a letter from a firm who said that they were debt collectors for HMRC and they wanted several thousand pounds to pay my tax bill. I spoke to my accountant who said to ignore it, I had a delayed payment to make (covid allowed delays) but not the figure this firm was asking for, s be very careful

    1. Avatar
      Gaetano on Reply

      Hi Ian, thank you very much for sharing your feedback with all of us. Indeed, there are loads of ways individuals with bad intentions use to scam us so, what you are saying about being very careful is indeed very true. Thanks

      1. Avatar
        Lindsay on

        I have also had the HMRC emails, but most recently I’ve had a few phine calls saying there is a warrant for my arrest by HMRC! I haven’t stayed on the line long enough to hear all of this but it is an automated call, one from London and one from Manchester.

      2. Avatar
        Gaetano on

        That’s really bad, after all these years, I still cannot understand how some people can decide to behave so badly towards the others! I mean, why would one scare someone like that?! Thanks for sharing Lindsay!

  3. Avatar

    All very good and useful information. I often get the calls from Amazon Prime. The only reason that I questioned it, is that I have Amazon Prime via BT so only deal directly with BT for this service. Otherwise I may have got caught out. The DPD scam also looked quite convincing and I had to think twice as my daughters are always having parcels delivered via DPD. One really needs to be on one’s guard, so articles that you supply are very helpful – thank you.

  4. Avatar
    Dorothea Beth on Reply

    Scammers must like me. I’ve had: (phone calls)
    1) Amazon Prime;
    2)”I’m ringing about your Internet problem”;
    3This is BT telephone preference”;
    4)”Your warrenty is about to run out”
    (by email):
    3)”Suspicious activity on my account”;
    4)”my Yahoo account will be closed unless”
    5) apparently I’m related to a Kenyan, Nigerian or French government minister who needs my (financial) help to transfer funds

    Out of all of these, the BT one was the one I had to double check – until I realised there was a very subtle mistake in the title of the BT sevue being provided. (I checked by ringing BT via the contact number on our BT bill – not the one the Scammers rang from)

  5. Avatar
    Dorothea Beth on Reply

    1) Never pay any money, or give any account details, passwords, pin numbers etc to anyone who rings and asks for them; If you were standing in your road, and a complete stranger or even someone you vaguely recognised asked for these details, would you give them out? Just because the call seems to be from some firm you’ve had dealings with, doesn’t mean you should be any less suspicious;
    2) If in doubt, ask them to write or email, but don’t give out any address or contact details – after all, they claim to be from a company you deal with, so should’t they have those details?….. ;
    3) Hammer home to friends and family that the Police and banks will never ring or turn up on your doorstep to ask you for money or account details in order to “help” them or “protect” you;
    4) Even if you think a call or email is genuine, (if it’s unsolicited ie. You didn’t ask whoever to get in touch), never click on a link or complete a form. Ring a contact number from paperwork you know to be genuine, like on your bill from your energy company, or get a trusted friend or relative to help you.
    5) Don’t worry that you might upset someone by putting the phone down, or by questioning what they want – if they can’t accept or understand your caution, you don’t want to be dealing with them anyway

  6. Avatar
    Jackie on Reply

    I received a text message saying my PayPal account was compromised and being closed and I had to click on a link to avoid this. I didn’t, checked my PayPal account and all in order so I ignored it. My account is up and running and no unusual activity has occurred.

  7. Avatar
    Jackie on Reply

    Beware jigsaw puzzles on Facebook! Ordered 2 for a cost of £45. Meant to be West end musicals, high quality etc. American site but once ordered it was a company in China. I received 2 puzzles of very poor quality in undefined boxes. They were very badly damaged and the puzzles were of fish! Nothing liked I’d ordered! It took 4 months via PayPal to get a refund and I had to post them back at my expense. On PayPal community this company has lots of complaints all on a similar theme.

  8. Avatar
    Gary on Reply

    I am very concerned that I may have been scammed by a company advertising on Facebook claiming marriage tax allowance rebate.
    I foolishly put in all my and my partners details,personal,national insurance number,email addresses etc.
    I took to be a government based subsidiary or something along those lines.
    I wanted to do it as a surprise for my partner as he has been providing for me as unfortunately i am not at work.
    I was surprised that I never received an email or text with a reference.
    A couple of days had passed and I still had not received any notification
    I then looked on the T & C s and saw I could cancel within 14 days,I emailed them straight away,expressing my wishes to cancel
    Its now Been la week and still have had no reply,and unfortunately there is no contact telephone number.
    I am at my wits end as they have all of our personal details etc.
    The company is ensign advisory Ltd,based in Altrincham in Cheshire.
    Can anyone please give me some advice

    1. Avatar
      Gaetano on Reply

      Hi Gary, thank you for sharing your experience with us here. I am so sorry to hear that you might have been victim of scam and, based on your description, probably the best thing to do is to follow the instructions under the chapter “Who to contact if you’re a victim of fraud” that you can find in this very page. If you scroll up you will see it there.

      Contact your bank immediately if you think you’ve fallen for a scam.

      If you have been defrauded or experienced cyber-crime you must report it to Action Fraud either online or by calling 0300 123 2040.

      You should also report what’s happened to the Financial Conduct Authority either online or by telephoning 0800 111 6768.

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