Scammers are becoming increasingly sophisticated, and there’s always a new scheme just around the corner waiting to trick unsuspecting victims into parting with their hard-earned money. Make sure you’re not one of them by being aware of the latest scams and how to spot them.
A quick recap on how to avoid the latest scams
We’re seeing a rise in scams attempting to trick people into parting with sensitive information, which gives criminals easy access to your money. In fact, according to the Experian Fraud Index Q4 2022, fraud in the Loans space has more than doubled in the last 24 months.
To avoid becoming a victim of fraud:
- Never trust unsolicited communications, including phone calls or emails
- Never part with sensitive or personal information such as account details or passwords
- Be wary of requests to move money – banks or any other financial services companies will not ask you do this
- Don’t click unfamiliar links or open emails, these are usually linked to phishing scams
- If a scheme sounds too good to be true, it probably is
- If you think you’ve been a victim of fraud, get in touch with your bank as soon as possible and contact Action Fraud to report it
Credit score scams
Credit score scams are growing in prevalence, and it’s something everyone should be mindful of – but particularly those who are looking for loans or who have a poor credit score.
The scam works like this: criminals ask you for your login details for your credit score account or app. They might be:
- Posing as a legitimate company requiring information from you
- Offering to improve investment opportunities if you give them access to your credit file
- Requesting money in return for a copy of your credit report (despite you being legally entitled to a free copy from credit reference agencies)
- Promising to improve your credit score if you give them access to the account (be aware that no company is able to repair your credit score. While credit bureaus can remove inaccurate information at your request, there is simply no possibility a company can remove negative yet accurate elements of your credit history)
Once they have access, the fraudster can then apply for credit in your name, given they have all the information they need to make a legitimate application. They’ll then take the money and leave you paying the debt.
Other popular credit score schemes include look-alike websites that scam you into entering your personal information, or fake emails trying to persuade you to click on a link to see your credit score. Stay vigilant by ensuring any website you visit has a secure connection (a padlock next to the URL), and always check email addresses to ensure the email is coming from a legitimate source.
And remember… never give any log in details to anyone.
This applies to all online accounts and applications, including credit score accounts such as Credit Club, ClearScore and Credit Karma.
Someone telling you they’ll double, triple or quadruple your money for next to nothing sounds too good to be true, doesn’t it? It most likely is.
Investment scams are on the rise as individuals look for ways to make extra money quickly. We’re all feeling the squeeze of the cost-of-living crisis, and scammers are using this vulnerability to pressure people into ‘investing’.
Worse, people are being scammed into taking out a loan to fund these investments. The scammer takes the money and you never hear from them again, let alone get your money back, and you’re left paying off a loan for years to come.
Unfortunately, these scams are particularly nasty given that you’re not technically a victim of fraud if you fall for them. You took out a loan willingly, and handed the money over willingly, so you may find it much harder to retrieve the stolen money.
Always look out for suspicious calls from ‘reputable’ brands or companies asking you for personal information.
Social engineering scams can be powerful because criminals impersonate those acting in an official capacity, such as a bank employee. They exploit your inherent trust in well-known brands and persuade you to part with important, private information that allows fraudsters to access your financial accounts.
Don’t trust unsolicited calls, emails or messages. A genuine company, such as a bank or other finance provider, will never call you out of nowhere and ask for your PIN, full password or ask you to move money to a different account. You should be the only person to ever use a passcode or activation code – no representative of a reputable company will ever ask you to tell them it.
We are, unfortunately, aware of some fraudsters impersonating Novuna. Please do stay vigilant and keep in mind that we will never:
- Ask you to reveal sensitive information, such as your account log in details
- Ask you to move money from one account to another
- Request an upfront payment to release your funds
- Pressure you to make an important decision regarding your application or agreement with us
Loan fee fraud
Loan fee fraud is a type of impersonation scam particularly prevalent in the finance industry. According to the FCA, there's been a 26% year-on-year increase in complaints from consumers who had fallen victim to loan fee fraud, with victims typically losing an average of £260.
If you’re looking into getting a loan, you may be contacted seemingly out of the blue by a loan company telling you they’ll give you the money you need – but you have to pay an upfront fee before receiving the money. Be extremely wary of this as it’s highly likely to be a scam. Once the fee’s paid, you won’t ever receive the expected loan.
The FCA's 3-step loan fee fraud checklist could help you to protect yourself from scams:
1. If you are cold called or emailed, it could be a scam.
2. If you’re asked to pay an upfront fee, it could be a scam.
3. If you’re asked to pay quickly or unusually, it could be a scam.
Novuna Personal Finance will never request an upfront payment – and other reputable lenders won’t either. If in any doubt at all, check your credit agreement or contact the lender directly before parting with any money.
Over £300 million was lost to cryptocurrency fraud in the past year alone. Cryptocurrency is designed to be exchanged and traded just like traditional currencies. As more people invest in cryptocurrencies, criminals have seen this opportunity as an easy way to commit fraud. Criminals use social media to advertise cryptocurrency schemes with high returns. The ads often offer easy money quickly to get your personal information or money.
Be wary of any adverts promising high returns from investments in crypto assets. Fraudsters will go to great lengths to convince you they are not a scam. But just because they have a professional-looking website or reviews from 'high net worth' investors, doesn't mean it’s genuine.
If you are considering investing in cryptocurrency, make sure you take your time and do your research before parting with any money. Consult with a financial advisor, who is accredited by the Financial Conduct Authority, to ensure you are investing your money wisely. Always check their credentials on the FCA register to make sure you’re dealing with a legitimate, authorised company.
Stay vigilant to keep your money safe
It’s so easy to make a mistake, and the effects can be catastrophic. Remain suspicious of unsolicited calls, messages and emails at all times to safeguard yourself against scams.