Scams: don’t be caught out

November 4th, 2008

Every year an estimated three million of us fall victim to scams sent by post, email, text, the phone and internet, costing consumers £3.5 billion a year. Here we take a look at the risks of financial crime and look at ways to protect yourself this Christmas.

From bogus lotteries and investments to deceptive prize draws, and from fake psychics to ‘miracle’ health cures, scams can take advantage of particularly vulnerable older people.

The Office of Fair Trade (OFT) has recently taken action to ban many unfair sales practices and tighten controls on traders, but mass-marketed scams remain to exist and consumers continue to fall victim.

The OFT advice to those that receive a possible scam offer is: ‘Stop, think, and think again’. Be sceptical and do not be rushed into sending off money to someone you do not know. A scam scheme is designed to con you out of your cash and there are scams out there for everyone. If you let down your guard then you too could become a victim.

So how can I protect myself?

There’s value in information. Never give your bank details to people you don’t know. Fraudsters will use the information to empty your bank account. Alternatively they will ask you to help them get money out of a foreign country in return for a large sum of money and may ask for an ‘advance fee’ to cover insurance before the funds can be released.

Avoid scams offering money guaranteed solely on signing up new members. Pyramid selling and free gift schemes claim to award you large amounts of money or ‘hi tech gifts’ by recruiting new members. The most likely approach may be an advert or even a personal approach from a friend who has been taken in. The likelihood that you will receive your award is very slim.

Get independent financial advice before making an investment in what looks like a golden opportunity, remember if it looks too good to be true, it probably is. Offers for ‘rare’ high value items like fine wine and gem stones that usually come with a ‘promise’ to rocket in value but are often dealing from traders not authorised by the Financial Services Authority therefore making if difficult for you to get your money back when things go wrong.

‘Remember – if it looks too good to be true, it probably is’.

Reproduced by kind permission of The Co-operative Group from their newsletter ‘EverGREEN’.

Entry Filed under: General