What is Fraud?

Date published: 11 February 2021 15:43

Fraud is when deception is used to gain a dishonest advantage - often financial - over another person. There are many different types, and crimes can be committed against both individuals and businesses.

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As the crimes are often committed from abroad, it can be extremely difficult, if not impossible, to recover any funds lost. This is why it is incredibly important for everybody to know how to spot the signs of a scam, to stay safe and prevent the fraud from happening in the first place.

Please take note of the crime prevention advice below to reduce your chances of becoming the next victim. You can also download a free copy of the Little Book of Big Scams here - a handy booklet which raises awareness of some of the ever-evolving ways that fraudsters will try to scam people out of their hard-earned money.

If you think you have been the victim of a fraud, it should be reported to Action Fraud, the national fraud and cyber crime reporting centre. Find out more on how to report fraud here.

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Courier fraud

What is courier fraud?

Courier fraud involves victims receiving a phone call from a criminal pretending to be from the police or another official organisation such as a bank.

The fraudster claims there is an issue with the victim's bank account, or requests the victim's help in an ongoing bank or police investigation.

Victims are then asked to withdraw a large sum of money which will be collected by a courier for 'evidence'. Other versions of the scam have seen victims told to withdraw large amounts of foreign currency, or purchase high value items such as watches.

How to protect yourself

  • Your bank or the police will never call you to ask you to verify your personal details or PIN by phone, or offer to pick up your card by courier. If you get a call like this, hang up.
  • After hanging up, you could call back the organisation on a trusted number to check it is a genuine call. Wait 30 minutes before you do so, as the fraudster may stay on the line. Alternatively, use a different phone altogether to make the call.
  • Never let a stranger take your credit or debit card from you. You should only ever have to hand it over at your bank. If it is cancelled, you should destroy it yourself.

Coronavirus scams

What are Covid-19 scams?

Sadly, fraudsters are taking advantage of the coronavirus pandemic to exploit people, at a time when many are concerned about their financial situation, their health and the state of the economy.

They may make contact to claim you are entitled to a government grant if you fill in a form with your personal details, or claim they are from NHS Test and Trace in an effort to trick people into giving away their information. In other scams, the criminals have advertised Covid-related products such as hand sanitiser or face masks which do not exist, or claimed people can get a Covid vaccine if they pay for it. NHS staff will never ask for payment for the Covid-19 vaccine.

How to protect yourself

  • Take a moment to stop and think before parting with your money or information.
  • Contact your bank immediately if you think you've fallen for a scam, and report it to Action Fraud.
  • Be wary of anyone who contacts you out of the blue asking for personal details or financial information.
  • Be suspicious if you are offered a heavily discounted or considerable cheaper product compared to the original price.

Pet fraud

What is pet fraud?

Pet fraud is when the offender advertises pets such as puppies or kittens for sale online, then when a victim expresses an interest they are asked to pay a deposit, or the full amount, to secure the purchase.

Unfortunately, it emerges the pets don't exist, the details of the 'seller' are false, and the victim realises they have been scammed.

How to protect yourself

  • Do your research - Before purchasing anything online, including pets, look up reviews for the site, or person you are buying from. If you are still not sure, ask a trusted friend or family member for their advice.
  • Trust your instinct - If you cannot physically go to see the animal in person, ask for a video call. If the seller declines, challenge them on why. If you have any suspicions, do not go ahead with the purchase.
  • Choose your payment method wisely – If you decide to go ahead with the purchase, avoid paying by bank transfer which offers you little protection if you become a victim of fraud. Instead, use a credit card or a payment service such as PayPal.

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Romance fraud

What is romance fraud?

Romance fraud occurs when you think you've met the perfect partner online - but they are in fact using a fake profile to form a relationship with you. They gain your trust over a number of weeks or months, and make you believe you are in a loving and caring relationship. However, the criminal’s end goal is only ever to get your money or personal information.

The fraudsters often pose as engineers, oil rig workers, doctors or military service personnel. Once they make contact, they usually ask the victim to move from the social media or dating site where they met onto another platform such as WhatsApp or Google Hangouts. This is because there is less chance of their crimes being detected on these platforms.

How to protect yourself

  • Be wary of revealing personal information about yourself online.
  • Never send anyone money or let them use your bank account to deposit money, you could inadvertently end up becoming a money mule.
  • If you are contacted by someone on a dating site, carry on using the site's messaging platform to stay in touch rather than moving to Google Hangout or Whatsapp.
  • Never allow anyone access to your bank account, transfer money on their behalf, or take a loan out for them.
  • Do not receive or send parcels on their behalf.

Investment fraud

What is investment fraud?

Investment fraud is when you get a cold call from a fraudster pretending to offer you the opportunity to invest in a variety of schemes or products that are either worthless or don't even exist. It’s also known as share sale fraud, hedge fund fraud, land banking fraud or bond fraud. The majority of investment frauds are run out of offices known as ‘boiler rooms’.

'Clone firm' scams are a particular type of investment fraud, where criminals imitate legitimate investment companies, and even clone their websites, emails and telephone numbers, to trick people into thinking they are investing with the genuine company.

How to protect yourself

  • Never take up offers of investments on the spot from cold calls. To make safe investments, check out the Financial Conduct Authority's ScamSmart scheme (see link below).
  • Don't give away your bank account details or sensitive information.
  • Boiler rooms tend to target people over 65. Talk to older family members and vulnerable people you care for to make sure they know how to spot bogus investments.

Telephone fraud

What is telephone fraud?

Telephone fraud is when criminals call you on the phone pretending to be an official of some sort, in a bid to make you part with money or important information. They may claim to be calling from HMRC (Her Majesty's Revenue and Customs), or another official-sounding body such as National Insurance, Inland Revenue, HM Land and Registry Services or a 'government solicitor'. The scams all follow a similar theme, with the fraudster telling the victim they owe payment in relation to unpaid tax and there is a warrant out for their arrest, or they are entitled to a tax refund and must provide their bank details.

How to protect yourself

  • Be wary of telephone calls you receive from an official-sounding organisation out of the blue. If something sounds too good to be true, it probably is.
  • If in doubt, hang up, wait for 30 minutes, and then contact the organisation - ideally from a different phone - on a trusted number to check the call is genuine.
  • Remember genuine representatives from organisations such as the government and the police will never object to you making checks to verify they are who they say they are, and they will never ask for your bank details.

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Doorstep fraud

What is doorstep fraud?

This type of fraud occurs when a bogus official turns up on your doorstep uninvited. They may claim to be from the 'water board' or another official-sounding organisation, and claim they need access to your home to make checks, e.g for a gas leak or to check your taps are working. This is a trick to get into your property so they can steal money or valuable items.

How to protect yourself

  • Be suspicious of anybody who turns up at your door uninvited
  • Always keep your door locked with the chain on
  • Ask a relative or friend who lives nearby to be on standby to pop over if somebody turns up on your doorstep and you're unsure of what to do
  • Ask to see callers' ID cards if they claim to be from a company. Genuine callers will never have a problem if you say you'd like to take extra steps to verify who they are.

Action Fraud - national fraud and cyber crime reporting centre

CIFAS - the UK's fraud prevention community

Friends Against Scams - National Trading Standards Scams Team initiative

ScamSmart - Financial Conduct Authority campaign to tackle investment and pension fraud

Take Five - UK Finance's national campaign

Think Jessica - raising awareness of postal scams

UK Finance - raising awareness of financial fraud