Protect your finances from scams: Part 1 - How to identify an online scam

• What is a scam?
• How do scammers get my personal details?
  
  
  
• How do I recognise a scam?
  You get an unexpected communication
  You receive an irresistible offer
  You're told you have to do something
  You're told to act immediately
  You notice there is something not quite right
  
  
  
• What do potential online scams look like?
• How can I protect myself from scams and online fraudsters?
• The MustCompare top 10 tips to protecting yourself from online scams
• Keep your operating system updated and change your passwords regularly
• Be smart in social spaces
• Keep an eye on your bank account statements and credit report
• Check if a contact is genuine
• Find out if a company is real
• Always run a check on a Financial Services organisation

In 2022 alone, over £1.2 billion was stolen through fraud, with nearly 80% of the cases starting online, according to the UK Finance Annual Fraud Report. The techniques used included emails to get users to reveal their personal information, fake technical support, ransomware and fraudulent online purchases.

Not too long ago, the 2020 Covid-19 pandemic saw online fraudsters taking advantage of public fear and panic. Coronavirus scams offered false information and used techniques to get a person's details or trick them into making a panic decision or an impulse payment.

Fraudsters may try to contact you, claiming to be from a financial institution (such as your bank, a lender or an insurance company), health organisations, a governmental authority (including HMRC) or even a charity.

So, how do you recognise a scam?

What is a scam?

A scam is a fraudulent, illegal act or scheme to take money and valuables from unsuspecting victims. Fraudsters will use deceptive methods, and they will go to great lengths to put up a front to pretend to be someone they are not.

Online scams may look genuine; they may even seem helpful. But they have one common objective: to get your money.

A scam usually starts with some form of "unexpected" or unsolicited communication. Perhaps it's an invoice, a call, an email or even an SMS, to mention just a few. Scammers may even know some information about you. For example, they may know your name, email address and where you recently made a purchase. Or they may know that you are a director of a company.

How do scammers get my personal details?

It might not be as difficult as you think for fraudsters to obtain information about you. For example, if you are a company director in the UK, your details will likely be available on a public register, such as Companies House.

You could have simply posted your CV online or provided personal details on a social media platform, such as Facebook or LinkedIn. You may have even entered a few details for what you thought was a "genuine" competition. Or, you may have entered your bank card details to buy a product you clicked on from a social platform that looked like an “unmissable deal".

Data breaches are another method. In 2018, as a result of a cyber attack, nearly 500,000 British Airways customers had their personal details stolen (including bank card details). In 2020, EasyJet, too, had a breach exposing some 9 million customer records; in some cases, the information included credit card details. Also, in 2020, 900,000 Virgin Media customers' personal information was exposed in a data leak.

TIP: Be careful how much information you put online about yourself, where you post it and who can see it. This includes social platforms, personal or company websites and online CVs.

You can use tools, such as the free dark web monitoring from ClearScore Protect to regularly check if your details and passwords have been exposed on the dark web - usually as a result of such data breaches. Norton also offers dark web monitoring where details like email addresses, physical addresses, phone numbers, driver's licenses and even credit card numbers are checked for potential exposure on the dark web.

Personal details from data breaches and other sources can be used by criminals to send communications, such as emails with links to fake websites. This is a method sometimes referred to as "phishing". In April 2020, the BBC reported that 18 million fake coronavirus scam emails were blocked by Google every day. The unfortunate truth is there are many ways cyber-criminals can obtain and may have already obtained your details.

So, how do you spot a scam?

How do I recognise a scam?

Scams are designed to look and sound like the real thing. They are hard to spot because they are made to trick you. Worse still, criminals like to play on emotions. Some scams are designed to excite you: for example, "You've won a competition, and we need your account details to transfer the prize money.”

Others are designed to scare you: for example, "If you don't log in to confirm your account details in the next 30 minutes, you will lose your money.” Here are some telltale signs of an online scam that you can look out for:

1. You get an unexpected communication
2. You receive an irresistible offer
3. You're told you have to do something
4. You're told to act immediately
5. You notice there is something not quite right

1. You get an unexpected communication

Fraudsters succeed with the unsuspecting and not the suspecting. It may look like an email from your bank or may sound like an urgent. It could seem to be an "important" message from a governmental organisation like HMRC. Or it may be an SMS from what appears to be your mobile provider. Even if it looks or sounds genuine, before proceeding, ask, "Am I expecting this?” If not, do not proceed.

TIP: Whether it's an email, an SMS or any other form of communication, before proceeding, ask: "Am I expecting this or is this out of the blue?"

2. You receive an irresistible offer

If it sounds too good to be true, then it usually is too good to be true. Don’t be tempted even if you have been promised or offered something that sounds amazing. The irresistible offer is a way to distract you and get you excited so that you drop your guard. It can be easy money, inside information, an investment with huge returns, a gift, an inheritance or a great deal.

3. You’re told you have to do something

An online scam will almost always require you to do something. This may be filling in a form with your details, making an upfront payment or entering your card details to make a "small" deposit. Or you might be told to do something as simple as open a link or download a tiny file. But even something seemingly trivial can result in scammers accessing your data. Your computer or device could become infected with ransomware too, which blocks access to your computer or device until the ransom money is paid to have it unlocked.

4. You’re told to act immediately

There is a sense of urgency to act or respond immediately or make a quick decision. It's another way to distract you and even cause panic so you don't think about what you are doing. Many fraudsters try to scare people into doing something. They falsely threaten victims with a fine, legal action or even imprisonment if you don't act immediately and pay for something.

5. You notice there is something not quite right

Most scams are made to catch you by surprise and push you to act impulsively, not logically. Fraudsters don't want you to have time to think because if you do, you may become suspicious that there is something not quite right. That's why before you part with your personal details or click on that link or download that file, stop and take your time to double-check it. Even if it seems just a little bit odd, don't proceed.

TIP: Before you part with your details or click on a link or download a file - stop and double-check it. Take your time to think it through and make sure it is genuine. No reputable company will want you to rush or threaten you to act.

What do potential online scams look like?

It’s not always easy to spot a scam; if it were, no one would get caught out. Here are some examples of potential online scams and warning signs to look for:

1. You get an unsolicited email with a link asking you to confirm your details.
2. The message you receive has basic grammatical errors or is badly written.
3. You get an email with an attachment or link from someone you don't know.
4. You get an email from a company you know, but the sender’s email is different or looks odd.
5. You receive a message about a competition that you don't remember entering.
6. An unexpected pop-up shows and asks you to click on a link or run some sort of software.
7. You get a friend request from a complete stranger on your social media account.
8. You’re told your bank is due to go bust, but you don't recall seeing any news about it.
9. There are payments on your card or bank statement that you do not recognise.
10. You get an SMS with a link saying it is a service provider you use, but the number is different.
11. You get an invoice from your supplier, but the payment or account details have changed.
12. You're asked to provide confidential information such as passwords or PINs.
13. You're told to give your bank details to get a refund when you are not expecting a refund.
14. You're asked for your personal information, but you cannot validate who they say they are.
15. You get a tip about a good investment or deal, but you're told you need to act now.
16. You're asked to give your card or bank details but told to be quiet about the matter.
17. A credit search shows on your credit file when you've not applied for any product or service.
18. You're asked to make a payment using vouchers, bitcoins, MoneyGram or Western Union.
19. The only contact details available for a company are a mobile number and, or a PO Box address.
20. You meet someone on a dating site, and they ask for money or your bank or card details.
21. A website requires your details, but it is not a secure HTTPS website (there's no padlock icon).

How can I protect myself from scams and online fraudsters?

Scams change over time, and many have become very sophisticated. To make matters worse, often, we give our details away too easily and are too trusting. So it's better to be over-cautious and be very precious about giving any information away.

Make it a habit. Even if it's just your email address for an online newsletter or your phone number for a competition, don’t give it unless you are absolutely certain it is safe to do so. Do not give any details if you feel rushed to act immediately.

Plus, consider applying the steps we mention next.

The MustCompare top 10 tips to protecting yourself from online scams

1. Avoid and be very wary of any unexpected contact and unsolicited offers.
2. Never give out details to anyone you do not know or cannot check where they are from.
3. Beware of being rushed or pushed into making a decision or into doing something.
4. Never open emails or text messages from senders you don't already know.
5. Avoid random or odd links and attachments sent to you, even if you know the sender.
6. Do not visit websites that are not secure (look for the padlock icon and HTTPS before the address).
7. Do not make payments unless you are sure they are legitimate and it is safe to do so.
8. Use your credit card to pay, this can give you that extra bit of protection if things go wrong and you don't expose your bank details.
9. Keep your identity documents, such as passports, safe. Never pass them to anyone who is not authorised to view them.
10. Never let your credit or debit cards leave your sight. And never share your PIN with anyone.

Keep your operating system updated and change your passwords regularly

Another good recommendation is to ensure the operating system on your device is up-to-date and that you use reputable anti-virus protection software. You should also check all your online accounts have strong passwords, and you regularly change them.

Some online services and sites (for example, Gmail, Facebook and iTunes) let you add extra checks for verification - known as 'two-factor authentication'. This additional step makes it more difficult for hackers to get your details.

You can also use tools like "Have I Been Pwned" to check if your email accounts are at risk or exposed due to a breach. Do not use public WIFI or WIFI connections that do not require a password.

Be smart in social spaces

Limit the amount of personal information publicly visible on online social spaces. Information and photographs can be used to create a fake identity elsewhere. Consider changing your settings so only friends can view your information and photos. If you receive a friend request from someone you do not know, check if they are friends of someone you do know. If not, you should consider not accepting the request or proceed with care.

Keep an eye on your bank account statements and credit report

Regularly check your bank account and credit card transactions. Immediately notify your provider if you see something suspicious or a purchase that you did not make.

If you’ve lost your card contact your bank or freeze or block it immediately. Not only will this help stop credit card fraud if it gets into the wrong hands, but if you delay, you may not be covered for fraudulent transactions if your provider feels you acted negligently. Remember, even without a PIN, criminals can still make online or contactless purchases. 

It is also good to regularly monitor changes and searches on your credit report. Searches on your credit report may mean someone is using or trying to use your details to get credit, for example, a personal loan or short term loan. Be sure to report any suspicious activity immediately. You can get a free credit report; here are 3 ways:

1. Statutory credit report - This is a free, basic version of your credit report that UK credit bureaus provide you when you request it. Normally, these offer one-off limited views of your credit history.
2. Free trial credit report - Many UK credit rating agencies allow you to access your full credit report for a trial period. This can vary from two weeks to a month; be sure to cancel the service once the trial period is over to avoid costs.
3. Free credit reports - Some providers offer a continuous free credit report service. These include services like Credit Karma and ClearScore. 
   

Check if a contact is genuine

If you are contacted randomly by someone you do not know, do not return the call or respond to the message or email. Instead, verify the contact by calling the organisation directly. If you receive a payment request or an invoice from a company you know, always check the account details have not changed. If you get a request to change the payment details, call the company directly to check and confirm the change.

Find out if a company is real

If you are unsure about a company or a website, find out more about them. Look for reviews on different websites and what others say about them by performing searches online. Avoid websites and companies with just a PO Box address or no landline to call. You can also check them out on Companies House to make sure they are real and are a registered UK company.

Always run a check on a Financial Services organisation

You can also perform additional checks on Financial Services organisations - such as banks, insurance companies and lenders. The industry is regulated by the Financial Conduct Authority (FCA). You can search for any authorised UK Financial Services company and organisation on the FCA Register. Remember you should only deal with Financial Services companies who are authorised by the FCA. 

The FCA also has a register of unauthorised firms and individuals. This register includes scammers and companies who have been cloned. 

In summary 

Online scams can be hard to detect, and some are very sophisticated. Stop and take your time to double-check things, especially if you are being asked for personal details or to open a link or download a file.

Ask yourself: is this communication unexpected? Does it sound a bit odd or too good to be true? Am I being pushed or rushed to do something? Remember to use our examples of potential scams and to put into practice our tips to protect yourself from online criminals. 

In part 2, we will look at the main types of online scams you need to be aware of. We also look at what you should do if you think something is a scam.

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