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3.6 million people fell victim to financial scams in the last year

Older man sitting on sofa with laptop and paperwork, looking concerned

Four in 10 (41%) UK adults experienced a financial scam attempt in the last 12 months, according to new research from Canada Life.

Of these, 3.6 million people (14%) personally fell victim to the scam.

The figures are a stark reminder to be on the alert for fraudsters who often use extremely sophisticated tactics to gain people's trust and get hold of their savings.

In the last year, the average amount lost to scams was £4,715 per person -- adding up to an astonishing £17.0bn across the country. More than two in five victims (43%) got all their money back, but over a quarter (26%) did not recover any of their stolen funds.

Interestingly, while people aged 55 and over were more likely to have been targeted in a scam attempt, they were less likely to have been a victim and lose money than younger demographics.

Types of financial scam

Among the most common types of financial scam are tax or debt collection scams; advance fee scams, for example when someone tells you are inheriting a sum of money and are required to pay an upfront fee or provide your bank details; and "hello mum" scams, where a scammer poses as a child or grandchild requesting an urgent bill or payment to be made.

Pension savings are often targeted by criminals as they can be high value and the rules around pensions are complex. These scams can include schemes claiming to offer early access to pension cash before the age of 55, and free pension reviews which are designed to persuade people to move money from their pension pot into a high-risk scheme.

Last year, Action Fraud also warned of criminals seeking to capitalise on the cost-of-living crisis. There was an increase in fake messages mentioning financial support from energy companies and the government, as well as fake investment opportunities promising high returns.

"With the cost-of-living crisis continuing to squeeze many households, it's a real field day for criminals and scammers to target vulnerable people," said Julia Peake, tax and estate planning specialist at Canada Life. "They are opportunistic and play on insecurities, family connections and fear, taking advantage of crises and market disruptions both home or around the world, and the number of people being targeted seems to be going up."

Steps to protect yourself

Criminals are experts at impersonating people, organisations and the police, says Action Fraud.

Take a moment to stop and think before parting with your money or information. If you see an offer that sounds too good to be true, it probably is.

Before making significant financial decisions, speak with trusted friends or family members, or seek professional independent advice. Be extremely cautious of any recommendation to take a large amount of money, or your whole pension pot, in a lump sum and invest it elsewhere.

With pension and investment fraud, scammers will often try to rush you into making a decision. Remember, legitimate organisations will never pressure you into investing on the spot.

You can also use the Financial Conduct Authority (FCA) register to check if the company is regulated by the FCA.

Posted by Fidelius on August 29th 2023

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