Fraud can often seem like a crime that only happens to other people, and you may think that if you came face to face with a scam, you’d spot it right away.
But in reality, scams are becoming more sophisticated, and millions of people lose significant amounts of money each year.
Research from Citizens Advice found that around 9 million people in the UK fell victim to financial scams last year, and the consequences were often severe. Of those who were scammed:
- 43% had to borrow money or take on more debt to stay afloat
- 24% relied on financial support from friends or family
- 20% had to work extra jobs or additional shifts to recover their losses.
With financial scams on the rise, understanding how they work, recognising the warning signs, and knowing what to do if you’re targeted are more important than ever.
Read on to discover six financial scams to watch out for.
1. Fake debt advice
This type of scam will often target you if you’re searching for debt help or financial advice online, particularly on social media.
Fraudsters posing as legitimate financial advisers may reach out and offer assistance with managing your finances or reducing debt. However, their real goal is to deceive you into providing sensitive personal information through fake forms or malicious links.
They may use AI-generated deep fakes and include videos on their pages of well-known faces recommending their services.
To protect yourself, always verify the legitimacy of financial advisers and avoid sharing personal details with unsolicited contacts or unverified platforms.
2. Friend-in-need scams
In these scams, fraudsters impersonate a friend or family member, claiming to be in an emergency situation.
They may urgently ask for money or request your bank details, often creating a sense of panic to pressure you into acting quickly.
CBS reports that there is an increasing number of cases in which an AI voice cloning tool has been used to mimic someone’s voice to persuade the victim to transfer money to a fraudulent account.
To protect yourself, always verify the person’s identity using a separate communication channel before sending money or sharing sensitive information. No matter how urgent the request seems, take a moment to confirm it’s genuine.
3. Pension scams
Pension scams often start with an unexpected call, email, or social media message offering a free pension review or promising high returns.
Once they gain your trust, scammers will try to convince you to transfer your pension savings into high-risk, poorly managed, or even entirely fraudulent schemes. Some may also claim they can help you access your pension early without fully disclosing the hefty tax penalties and financial risks involved, all while charging hidden fees.
To protect yourself, be wary of unsolicited pension offers and always verify the legitimacy of the company or adviser. Before making any decisions about your retirement savings, it’s a good idea to consider speaking with a qualified financial planner.
4. Investment scams
Investment scams entice victims with promises of high returns or exclusive opportunities. Fraudsters may urge you to invest in luxury assets like gold, property, cryptocurrency, or wine, only for the funds to disappear into non-existent or fraudulent schemes.
These scams often appear highly professional, featuring slick websites, polished brochures, and even fake testimonials to build credibility. But once you transfer your money, recovering it is nearly impossible.
Be cautious of unsolicited investment offers, especially those guaranteeing high returns with little risk. If an opportunity sounds too good to be true, it probably is.
5. Parking QR code scams
In this scam, fraudsters cover legitimate QR codes with counterfeit stickers at parking facilities. Scanning the fake code redirects you to a fraudulent payment website designed to steal your personal and financial information.
As QR codes become more common, these scams highlight the importance of staying safe when making digital payments. Before scanning, check that the code hasn’t been tampered with, and whenever possible, use official parking apps or websites to pay directly.
6. AI scams
Criminals can use AI to enhance the believability of many of the scams above.
Other ways scammers might exploit AI to improve their tactics include:
- Phishing – AI can write convincing and natural-sounding phishing emails and text messages, making it harder for you to spot red flags
- AI-generated images – Scammers might use AI to create professional websites, social media accounts and ads, fake certificates, and headshots for profiles
- Deepfake videos – Scammers may use AI-generated videos to promote fraudulent products and services
- Fake and cloned voices – AI can also generate or alter voices for video and phone scams.
Though they may be harder to spot, being aware of unusually polished content, discrepancies in visuals or audio, and requests for sensitive information can help you identify potential AI scams.
Be sure to act if you’ve been the victim of a financial scam
If you’ve fallen victim to a financial scam, act quickly by reporting it to Action Fraud. They will log your case, assist in recovering lost funds, and use your report to help prevent similar scams from targeting others.
For fraud involving debit or credit cards, online banking, or cheques, contact your bank immediately so they can freeze your account and limit further losses.
If you’re in an emergency or the scam is still in progress, call the police right away.
Get in touch
Our team of independent financial advisers in Lewes can help protect you from financial scams. They can work with you to identify the warning signs of a scam, provide guidance on protecting yourself, and advise on the steps to take if you become a victim.
To find out more, please get in touch by emailing us at financial@barwells-wealth.co.uk or by phone on 01273 086 311.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
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