The current coronavirus pandemic is having an impact on our finances. Many of those with investment portfolios will have seen their value fall over the last few weeks, whilst others will have difficulty contacting their bank as the number of people seeking support rises. Sadly, fraudsters are taking advantage of this and a number of scams have been reported. It’s important to remain vigilant to protect your savings.

Covid-19 has been affecting our economy for just a few months but the number of reported scams is already staggering.

At the end of March, Action Fraud reported there had already been over 100 cases of Covid-19 related fraud cases, with total losses of around £970,000. The first coronavirus report was received by the organisation on 9th February, just weeks after the first case was confirmed in the UK.

Scams using coronavirus are a mix of new types of activity and adapted previous techniques to try and part you from money. With uncertainty, fraudsters are taking advantage of people feeling nervous about their future and finances to spread misinformation.

In a statement, the Financial Conduct Authority said: “A major event like coronavirus can initiate new types of scam activity. You may have already seen reports of fraudulent activity around the sale of face masks and hand sanitizer.

“When it comes to financial services, the scam activity is more nuanced and often appears after the initial shock of a major event. With this in mind, we are urging consumers to be vigilant for scams that could appear over the coming months.

“Scammers are sophisticated, opportunistic and will try to get personal details or money from victims in many ways. They tend to target people who are more vulnerable or susceptible to being scammed, particularly in the current climate with many more people being at home.”

What scams are fraudsters using?

There are numerous types of scams but some of the ones to keep in mind at the moment are:

  • Exploiting short-term financial concerns: Some people have lost all or a portion of their income due to the pandemic. As a result, more people are looking for short-term financial assistance to bridge the gap, such as a loan. With demand rising and the staffing numbers falling among banks and other lenders, it can be difficult to get hold of the right organisations. Fraudsters are taking advantage of this by claiming they can offer short-term assistance but demanding that an upfront fee is handed over, this is typically a relatively small sum, ranging from £25 to £450.
  • Good causes scams: In the wake of the pandemic, we’ve seen millions donated to charities and communities. With many people wanting to lend a hand, fraudsters are using these good intentions to get their hands on your money. You may be approached to invest in good causes, such as the production of personal protection equipment (PPE) or drugs to treat coronavirus. Scammers will play on your emotions to encourage you to hand over money, as well as suggesting you’ll benefit from high returns.
  • Calls from a claims management company: Many of us have lost money or are awaiting refunds following cancelled holidays and events, from festivals to weddings. There has been a lot of confusion around when customers are entitled to refunds and companies may have struggled to communicate with consumers amid the large numbers they need to deal with. This has led to a scam where people are contacted by a fraudster claiming to be from a claims management company, insurance company or credit card provider stating they can help you recuperate losses, with the intention of securing your personal data.
  • Clone firms: This scam refers to fraudsters contacting you claiming they represent genuine firms that can offer financial advice and sell products. As they use the details of an existing firm, it can be difficult to spot a scam. The FCA warned cloning is particularly prevalent for life insurance firms. Remember, to be cautious of all unsolicited contact, including communication that comes through emails, social media or text messages, and if you’re unsure, follow up with the firm directly using their listed contact details, not those provided during a call.

On top of this, the usual tactics that fraudsters use are still prevalent. This may include receiving a call from someone claiming to be from HM Revenue & Customs (HMRC) about a rebate, emails regarding TV licences, offers of a ‘pension review’ and cold calls from supposed financial services firms. Taking advantage of the difficulties getting through to some organisations during these unprecedented times, scammers hope that you’ll be more willing to engage with them, providing a foothold for accessing your data.

6 ways to protect yourself from scams

  1. Check the FCA register to ensure firms you’re dealing with are authorised and obtain contact details.
  2. Be cautious of all unsolicited contact, cold calling in relation to pensions was banned last year.
  3. Don’t make knee-jerk reactions, genuine firms will understand the need to take time to think before making a financial decision.
  4. Understand the products you have, for example, fraudsters may claim you can ‘unlock’ your pension early, but in the vast majority of cases, this isn’t an option.
  5. Be realistic. Scammers may claim they can offer you high returns, low-risk investments or investments that have guaranteed returns, whilst tempting these claims should be red flags.
  6. Remember, if it’s too good to be true, it probably is.

If you’re worried about your finances in the current climate, including if you’ve been contacted and aren’t sure if it’s a scam, please get in touch.