Protect yourself from financial scams

The number of people falling victim to financial scams is increasing significantly year on year and the scammers are targeting people from all backgrounds, ages, from low skilled labourers to high income generating executives, which means anyone reading this article could be a potential victim. The increase in financial scams can be partly blamed on the ever increasing sophisticated technology and the recent (2014) introduction of pension freedoms. Here’s what you should look out for and how you can protect yourself…


With the introduction of pension freedoms in 2014, which allows anyone aged over 55 to access their pension pot, the government estimates that £43 million has been unlawfully obtained by fraudsters with victims on average loosing over £15,000. One of the most common scam is where fraudsters entice people to withdraw their pension and invest it elsewhere, these investments will promise astronomical returns that will either fail to materialise or in worst case scenarios the investment won’t exist at all. 

One technique is known as ‘pension grooming’, when fraudsters groom victims on how to respond to pension providers when concerns about suspicious transfers are raised, fraudsters will tell their victims that pension providers don’t want to protect their savings, but want to keep hold of their money. Other techniques allow people to access their pension before age 55, usually through a loan. The company usually won’t mention the 55% tax charge associated with accessing your pension early or the huge fees the company charges.


Scammers are now trying harder than ever to entice people to put their money into exotic investments that sounds too good to be true, and usually that turns out to be the case. The investment opportunity could be a plot of land, an off-plan block of apartments in Bangladesh which promises sky high returns or a hotel development. Sometimes the fraudsters are pretty convincing at impersonating a genuine investment company, they may show you glossy brochures, certificates and professional looking websites. The scammer who will act as the broker will usually contact you out of the blue with what looks like an incredible opportunity, and try to pressure you into making a quick decision. 


Lately there has been a rise in banking scams and most often victims are old age pensioners and vulnerable individuals, but anyone can fall victim to these callous fraudsters. These criminals contact potential victims pretending to be their bank, they do so in order to obtain password and PINs and in some cases, dupe people into transferring their money to them. Genuine banks never phone you to ask for your PIN or online banking password, nor do they ask you to update you personal details by following a link in a text message.


Scammers are often trying to catch people out by sending fake tax rebate messages. The emails or text messages look like they’re from HM Revenue and Customs (HMRC) and ask you to click on a link, and if do, the probability is that you could infect you computer with malicious software or be directed to a bogus website. HMRC will never send you notification of a tax rebate or refund by email or text, nor does it ask people to disclose personal or payment information by these methods.


Where do I start!, if you read my other articles on this subject matter, you will know that I am no fan of BitCoin or any other cryptocurrencies, I firmly believe all these virtual currencies will one day go down to their actual value, which is a big fat ZERO. We are beginning to see the demise of cryptocurrencies with the great firewall of China blocking all crypto activities and regulators across Asia and Europe are gradually closing their doors to it too, even facebook recently banned the advertisement of ‘initial coin offerings’ on its platform. 

Nonetheless, BitCoin scams are popping up every day, mainly because cryptocurrencies are not regulated by governments. Scammers try to trick people into visiting malicious websites, entering their private details or clicking links that contain harmful software. Some exchanges and initial coin offerings (the way these companies raise capital) have been discovered to be completely fake.


Anyone can be victim of fraud, but according to Action Fraud, the groups most likely to lose money is men aged 36 to 55, this group tends to take risk when investing, acts on impulse and most likely to have the ability to invest large sums of money. This increases the likelihood of them becoming a victim and, when they do, they feel a sense of shame that results in them not reporting the fraud.


There are simple things you can do to avoid getting duped: 

  • Don’t unveil any personal data when you receive cold-calls or unsolicited texts or emails
  • If you get an offer of an incredible investment opportunity, don’t believe it simply because the person sounds convincing, do your own thorough research and approach independent intelligent people for advise if you can
  • Don’t respond to text messages or emails from someone you don’t know
  • Don’t deal with unregulated advisers
  • Check the Financial Conduct Authority website to ensure the company is legitimate and regulated
  • Be wary of overseas investments
  • Before committing funds towards any investment, make sure that you are 100% confident that it is genuine and that you fully understand the risks associated with it
  • Don’t fall for schemes that offer guaranteed returns because almost nothing in life is guaranteed, so if a company says it can deliver guaranteed returns of any amount, don’t touch them with a barge pole
  • Don’t rush to make a decision
  • Don’t let a pushy sales person persuade you into doing something you may later regret. Read any documents carefully before you sign the dotted line

I hope you found my article informative and hopefully it will prevent you, your family and friends from falling victim to scams. You can watch my recorded presentation of this article by clicking here.


Nazrul Hoque – 01 March 2018