How to avoid financial scams

In the first half of 2022, criminals stole a staggering £609.9 million from consumers via both authorised and unauthorised fraud and scams.

Financial scammers continue to look for new ways to exploit potential victims, with fraudsters using the cost of living crisis to trick victims into parting with their financial information.

The founder of My Community Finance shares his top ten tips on how to avoid falling victim to a financial scam.

1. Check URLs and email addresses

If you receive an email or land on a website, check the web address and the contact email address is the official one before making any purchases, filling out any forms, or clicking on links because fraudsters are skilful at imitating legitimate companies.

2. If your bank calls you, hang up and ring back

If you get an unexpected call claiming to be from your bank, tell them you’ll ring them back before you answer any of their security questions. Use the phone number on the back of your credit or debit card to call back.

3. Create strong passwords, don’t reuse them and change them regularly

We’ve all been guilty of reusing passwords, but it’s a considerable risk because if a company experiences a data breach, the fraudsters will have access to lots of your accounts and information. Make sure you’re creating passwords that are difficult to guess, change them regularly and avoid using the same password for more than one account.

4. Lockdown your social media accounts 

Social media accounts make life easier for fraudsters, who use them to learn details they’ll use to steal from you. Set them to private and only accept follow requests from people you know. Don’t share photos of your passport or driving licence, and never disclose information that may reveal your passwords.

5. Do your research

Before entering personal or financial information on a website you’re unfamiliar with, verify it’s legit by reading reviews, checking the brand’s social media accounts and look up their address on Companies House – the government agency that maintains the register of businesses in the UK.

6. If it seems too good to be true – it probably is

If someone contacts you out of the blue, saying you’ve won a competition you didn’t enter, it’s almost definitely a scam. Don’t give any information, download files, transfer money or click on any links.

7. Be very wary of spelling mistakes and bad grammar

Bad grammar and spelling mistakes will often expose a scammer. You’re unlikely to find poorly written and misspelt content on the website or in the emails or texts of reputable businesses.

8. Your bank will never ask for your full PIN or banking password

Never share your full PIN or passwords over the phone or online. Your bank will never ask for this information – it’s essential to keep them to yourself to prevent fraudsters from using them to access your accounts.

9. Don’t feel rushed 

Scammers often create a sense of urgency to get you to act before you have a chance to think about what you’re doing or run it past someone. Never feel pressured to make a decision quickly.

10. Seek the guidance of a professional

Before making any investment decisions speak to an independent financial advisor who can advise you properly and make you aware of any known scams.

Personal finance expert, and founder of My Community Finance, Tobias Gruber, said:

“Protecting yourself from financial scams is becoming increasingly more difficult, particularly in the current economic climate, with fraudsters using the cost of living crisis to trick vulnerable people into sharing their financial information. 

“Scams have become progressively more sophisticated over the years, so you must be vigilant about who you share your personal information with and what links you’re clicking on when you’re online. Trust your instincts, do your due diligence and never feel rushed to help protect yourself from falling victim.”