Types of Fraud

Unfortunately, some types of fraud are now very hard to recognize, therefore it is essential you know the types of fraud that are out there and how to recognise these.

Below are ten of the most common types of fraud/Scams to look out for; however, this is not an exhaustive list.

Types of Fraud/Scams

Romance Fraud

If you're looking for love, make sure you don't fall victim to romance fraud.

Romance scams involve people being duped into sending money to criminals who go to great lengths to gain the victims trust and convince them that they are in a genuine relationship. These requests might be highly emotive, such as criminals claiming they need money for emergency medical care, or to pay for transport costs to enable them to visit the victim. The fraudster will often take their time to build a relationship with their victim/s.

Tour operator and holiday scams

This is when people hand over money only to discover the holiday, accommodation or flight they paid for doesn't exist.

Fraudsters are conning unsuspecting holidaymakers and travellers out of millions of pounds each year or leaving them stranded with nowhere to stay.

Ticket scams

This is where fraudsters are selling tickets to an event/show and the tickets are usually fake.

When this occurs, victims will usually only discover this when they attend the event and the venue declare their ticket is invalid. The tickets are often copied from an original, or it may be that they are simply non-existent, therefore the ticket is never received.

Phishing, vishing and smishing

Phishing

This is the most used method by cyber criminals to commit fraud. It involves sending fraudulent emails to victims appearing to be from their bank or a company which they may have an account with. The email will usually contain a counterfeit website link/attachment which is appearing to be their genuine bank/a company they use. The email will often be encouraging the victim to click on this link/attachment.

Vishing

This is a two-step method and is the type of threat that involves a fraudulent phone call using information they may have previously obtained online.

First, the fraudster will steal confidential information online, by email or on a fraudulent website (phishing); however, once they have done this, the fraudster would need the password and/or digital token to carry out and validate an operation, this is when the second step takes place.

Secondly, the fraudster will call the victim on the phone, claiming to work for the bank/company. Using particularly alarming messages (such as there has been a safety breech we need to rectify) the fraudster will then try to convince the victim to reveal their password or digital token which is needed to authorise the transactions.

Please remember, banks will NEVER contact customers to request sensitive and confidential information such as their passwords, digital tokens and/or pin numbers.

Smishing

This is the act where fraudsters will send messages on WhatsApp and/or via text message. The fraudster will send a message to the victim, often claiming to be from their bank saying that a suspicious purchase was made with their credit card. The text message will then ask the victim to contact their bank, however, will give a particular phone number for them to use (which will usually not be their banks actual number).

The victim would then call the number within the message and this is when the fraudster, (who will be imitating the bank) strikes and requests confidential information in order to cancel the ‘suspicious purchase’. Sometimes the message can also include a link to a fraudulent website to request the sensitive information this way; similarly, to phishing.

Investment Scams

To carry out this scam, fraudsters will buy shares in a small company at a low price, and then will proceed to send out false tips about the company having great prospects. As more people invest, the more the share prices rise, this then allows for the fraudsters to sell their shares at the peak of the price rise.

Remember to always ensure a company is credible before investing, one way of doing this could be through a credible financial advisor.

Pension Scams

This scam is when fraudsters try to persuade pensioners/pension savers to transfer their entire pension savings, or to release funds from it.

Fraudsters will often do this by making attractive-sounding promises they have no intention of keeping. The pension money can be stolen outright or it can often be invested into unusual, high risk investments such as:

• Overseas property and hotels
• Renewable energy bonds
• Forestry
• Parking
• Storage units

Remember to speak to an independent adviser authorised by the Financial Conduct Authority (FCA) before making any transfer(s).

Advance Fee and Lottery Scams

The advance fee scam is a form of fraud, which is one of the most common types of confidence tricks. The scam typically involves promising the victim a significant share of a large sum of money, in return for them providing a small up-front payment – the fraudster will often claim this will be used to obtain the large sum.

A lottery scam is a type of advance-fee fraud which begins with an unexpected email notification, phone call, or letter (sometimes including a large cheque), exclaiming that "You have won!" a large sum of money in a lottery.

To protect yourself from these types of frauds, think ‘have I brought a lottery ticket?’ Block unwanted numbers, don’t act impulsively – think before you act, and above all remember the saying ‘if it’s too good to be true, it probably is’.

Courier Scam

This is when the fraudster contacts victims by telephone pretending to be a police officer or bank official.

To substantiate this claim, the caller might be able to confirm some easily obtainable basic details about the victim such as their full name and address. The fraudster will then create a story in order to gain trust from the victim, such as a jewellers or currency exchange is operating fraudulently and they require assistance to help secure evidence.

Victims are then asked to co-operate in an investigation by attending their bank and withdrawing money, withdrawing foreign currency from an exchange or purchasing an expensive item to hand over to a courier for examination – who will also be a fraudster.

At the time of handover, unsuspecting victims are promised the money they’ve handed over or spent will be reimbursed, but in reality there is no further contact and the money is never seen again.

To protect yourself from such fraud, remember your bank, nor the Police will contact you over the phone and ask for personal details or verification of numbers on your bank card.

Hang up the phone and block the number.