Fleeced and furious: Talk scams before it’s too late and save yourself a fortune

Scam Awareness Week –  Fleeced and furious: Talk scams before it’s too late and save yourself a fortune by Tim Bennett, Partner and Head of Education at Killik & Co

 
Scammers have been active for decades. However, according to the Financial Ombudsman Service (FOS), the recent number of reports has reached a six-year high and hit a new quarterly peak. Many of the crimes being committed are online, as scammers find new and creative ways to target potential victims. That’s why, with Scam Awareness Week around the corner, now is the right time to have conversations with family and friends about protecting yourselves and your loved ones.
 

The issue of under-reporting and the importance of communication

 
In light of the FOS data, it’s surprising that our own research shows that only 18% of people overall have admitted to another family member that they have been scammed. However, this figure rises to 32% of those aged 18-24, and 25% of those aged 25-34, suggesting that age is a factor when it comes to the likelihood of reporting fraud.

Further, findings from the National Trading Standards last year revealed that less than a third (32%) of those defrauded reported the crime to the authorities, with many victims preferring to feel angry with themselves, stupid and even embarrassed. Again, there is clearly another generational disparity here, as although younger people seem generally more open to discussing their finances and admitting to mistakes, most people are clearly still unwilling to be open about bad experiences.

That is a pity. The ability to speak to other people about scams is one of the best ways to protect yourself and your loved ones. Indeed, 50% of those who said someone in their family had been scammed conceded that a conversation would very likely have prevented it from happening in the first place.
 

Who is most at risk?

 
Five of the most dangerous words when it comes to money (and life in general) are, “it won’t happen to me.” The reality in 2024 is that anyone can be a scam victim – complacency only plays into scammers’ hands. The risks keep rising too thanks to a lack of online controls over areas such as social media and the advent of “get rich quick” opportunities such as some cryptocurrencies. There is also a significant cause for concern when it comes to the rise of AI, with some scammers using the technology to impersonate family and friends to access your money or personal information.

So, who could be on a scammer’s list? They tend to target what the FCA terms as “vulnerable.” But don’t be fooled – that description casts a wider societal net than you might imagine. Scams don’t just target the elderly and lonely, they are also aimed at the young and naïve (often via crypto schemes). Then there are the recently bereaved, the sick, the economically desperate (trapped by the rising cost of living and borrowing costs), the poorly informed, the over-confidant, anyone prone to the “fear of missing out” (FOMO), and those who are plain bored. In short, scammers can go after almost anyone and they deploy an increasingly sophisticated array of tactics.

How to avoid becoming a victim

 
When it comes to ways of avoiding becoming a victim of scams, most of what follows falls into the common-sense category. However, that is much easier to say once you can spot the warning signs that an offer is simply too good to be true.
 

1. Stranger danger: Never give out personal or financial details to people you don’t know. This ought to be an obvious point and yet people still make expensive mistakes here. If in doubt, disengage from anyone you don’t know as fast as you can.
2. If it’s too good to be true, it probably is: Watch out for offered returns which are simply too high or can be made very fast. Investing successfully takes time and there are few shortcuts. So, even if you are desperate to make some money, stay on your guard.
3. If you can’t explain what you’re buying to a family member, think twice: If you don’t understand it, don’t buy it. Online cryptocurrency is an obvious example.
4. 0800-double-NO: Never agree to call someone back on anything other than an official number. Even if you believe your bank, for example, is calling you, insist on phoning them back and use the number on your bank card, not any number given to you over the phone.
5. The devil is in the detail: Be alert to fake letters, emails, websites, and social media channels. Look for suspicious spelling, logos, and URLs. In short, if an opportunity doesn’t “smell right”, give it a miss.