One in five people across the UK fell victim to a finance scam – such as a fake pension or investment opportunity – in the last year, Citizens Advice has revealed. The charity estimates 9 million people have been affected.

Showing the worrying toll these scams can take on people’s lives, over two in five of those scammed (43%) had to borrow or increase their debt in some way to get by afterwards. Almost a quarter (24%) had to turn to friends or family for financial help, while a fifth (20%) had to take on additional jobs or shifts at work.

Citizens Advice wants to help people stay safe by exposing scammers’ top tactics:

The top financial scams of the last year were as follows, with some individuals surveyed having experienced more than one of these:

1. Fake debt advice via social media (estimated 3 million people affected).

A person searches for ‘debt help’ on social media but gets snared by scam accounts. These accounts offer help with personal finances, including debt solutions, then push forms to get hold of personal data.

2. Friend-in-need scams (estimated 2.5 million people affected).

A scammer poses as someone a person knows to either ask for money or ask the person to forward a 6-digit verification PIN number (which will then give access to the victim’s accounts).

3. Pension scams (estimated 2.5 million people affected).

The scammers get in touch unexpectedly to offer free pension reviews with big promises. They then move the person’s money into what are actually badly run, high risk or entirely fake investments. Some scammers will offer to help a person release funds from their pension without fully explaining the implications, or charge massive fees to do so, and then move the money into their own schemes.

4. Investment scams (estimated 2.5 million people affected).

The scammer convinces a person to move their money into a fictitious fund, or to pay for what later turns out to be a fake investment, including gold, property, carbon, cryptocurrencies or even wine.

5. Parking QR code scams (estimated 2.5 million people affected).

Stickers with bogus QR codes placed over genuine codes at car parks, directing consumers to fake payment websites where their personal and financial information is stolen.

Over three-quarters (76%) of all types of finance scams were conducted through social media sites, according to the charity’s research.

Eric’s story: “I was frantic, traumatised and couldn’t face telling my family how much I’d lost.”

Eric* came to Citizens Advice after falling victim to trading and cryptocurrency scams. He had watched an online tutorial video about a legitimate trading system, but alongside it was an advert leading to a fake platform run by scammers. The subsequent scams devastated his life, costing him his savings, home and health. He told us he’d never experienced such disastrous financial trouble like this.

He says: “After I started putting money into the ‘trading system’, I immediately got aggressive phone calls several times a day, saying: ‘You’ve got to keep trading or you’ll lose everything.’ Any requests to withdraw my money were ignored.  It’s a very unpleasant, stressful, intensive and coercive experience. I was frantic, traumatised and couldn’t face telling my family how much I’d lost. I’d never experienced such disastrous financial trouble like this in the past. I’d paid off my mortgage and had a nice house, a family home. I had no clue that you could so easily lose all that almost overnight.”

Steps you can take to better protect yourself and your loved ones.

Jane Parsons, a Citizens Advice consumer expert, has some top tips to spot scams:

  • Be wary if it seems too good to be true – for example, a pension that yields much more than you’d expect.
  • You’ve been pressured to transfer money quickly.
  • You’ve been asked to pay in an unusual way – like using an iTunes voucher or a transfer service.
  • You’ve been asked to give away personal information, such as passwords, PINs or verification codes.
  • You spot signs that the organisation or person you are dealing with isn’t genuine – perhaps the email address doesn’t seem quite right. Always step back and double check if you have any doubts at all.

If you’ve been scammed:

  • Talk to your bank or card company immediately if you’ve handed over any financial and/or sensitive information, or made a payment.
  • Report the scam to Action Fraud on 0300 123 2040.

 

For more information contact: Citizens Advice press office  Tel: 03000 231 080