Investors warned to be on their guard against fraud amid fall in living standards

interactive investor comments on UK finance fraud losses data.

Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “It appears to be a case of one step forward, two steps back. While unauthorised fraud losses fell last year, with the banking and financial industry preventing £1.4 billion of unauthorised fraud from getting into the hands of crooks, authorised fraud losses rose – mainly due to an increase in losses from impersonation scams

“Fraudsters wreaked havoc during the pandemic by taking advantage of consumers' fears and shrouding their nefarious schemes among correspondence by the government and legitimate organisations relating to coronavirus measures. The worry is history could repeat itself amid the biggest fall in living standards in generations.

“We often overestimate our ability to spot a financial scam when, in reality, even those who consider themselves financially savvy aren’t immune to increasingly sophisticated scams.

“We all need to remain on our guard against scams. In addition to the basics, which include not sharing your login credentials and ensuring that online transactions are made from secure and trusted websites, be mindful of who you disclose personal information to and remember that if a proposition seems too good to be true then it probably is.”

Myron’s tip to avoid financial scams

If it sounds too good to be true, it usually is

There is no such thing as a free lunch when it comes to your finances. If you come across a proposition that promises ridiculous returns and downplays risk, it probably is too good to be true.

Before you commit to any offers, make sure you do extensive independent research on the company and make sure you check all the information yourself – don’t just take their word for it.

Look out for the tell-tale scam signs

Scams can be difficult to recognise, but there are things you can look out for such as a dodgy looking website address, poor grammar and spelling, a lack of reliable contact information among other. And never trust anyone wanting personal information.

You can search for a company's details on GOV.UK. This will tell you if they're a registered company or not.

Cold calling relating to pensions has been banned since 2019, but that still doesn’t stop unscrupulous individuals from using this method to scam people out of their cash. No reputable pensions firm would call you out of the blue to suggest you transfer your retirement nest egg to a better deal. When in doubt, simply hang up.

Also beware of things that signal illegitimacy. If the firm doesn’t allow you to call back, it is most likely because it is a fraudulent enterprise. Also beware of firms that only list mobile phone numbers or a PO box address on their website.

Fraudsters may try to tempt you in by offering free pension reviews. Don’t fall for it. It could be a trick to get you to share personal information.

Do your due diligence

“Be suspicious of any unsolicited correspondence related to your finances. Why take the risk?

“Have a look at the FCA’s ScamSmart website to see if the offer is a known scam. You should only deal with financial services firms that have been authorised by the city watchdog.”

Beware of offers to unlock your pension before age 55

Schemes that offer to unlock your pension before age 55 should be avoided at all costs. These schemes, also known as pension liberation and pension loans, are trying to get you to break the law and are likely to result in you paying huge administration costs and big tax bills, in some cases leaving people with no savings for retirement.

Only in very rare case, such as very poor health, is early access to pension possible.

Key points

• Over £1.3 billion stolen by criminals through authorised and unauthorised fraud in 2021.
• Criminals continued to take advantage of the pandemic last year by impersonating a range of organisations to commit fraud.
• UK Finance reiterates calls for cross-sector action to target the criminals responsible.