IF there was a financial boom in 2015, it was undoubtedly in the world of scamming.
Fraudsters are traditionally one step ahead of the game; by the time the victims alert the authorities, they are long gone. By the time these scams become headlines, these criminals are well into their next “con”.
In many circumstances the victims never meet the person who has duped them, the internet providing a brand new Pandora’s box of smoke and mirrors and cruel deception.
Independent financial advisers (IFAs) are well aware of just how sophisticated and believable these scams can be. Simple precautions will eliminate some of the dangers, and common sense can play a big part in keeping the fraudsters at bay.
Unfortunately, such is the devastation of intelligent professional people in being duped that they often feel embarrassed and stupid at being taken in; consequently, the authorities believed that many do not report their gullibility, and the extent of the damage, financial and beyond, is much greater than official figures show.
Fraud losses on payment cards, online and telephone banking and cheques totaled £325.3 million in Jan-June 2015, compared to £307.7m the previous year.
The new data, produced by Financial Fraud Action UK (FFA), revealed that, increasingly, the fraudsters are attempting to target individuals directly, putting much of the responsibility on not being scammed on self-vigilance and policing.
This data, for the first time, also gave figures for prevented fraud. It stated that banks and credit card companies’ security systems prevented a total of £910.9m fraud in the first six months of 2015, equivalent to saving £7 of attempted £10 fraud.
But the talk of millions of pounds of hard-earned money vanishing, even allowing for the fact that two-thirds of attempted fraud is being prevented, seems to pale into insignificance when reading the heart-breaking and staggering stories of these audacious cons.
The Daily Mail recently gave a double-page spread to well-known journalist and author Max Hastings. It began with an email from a Mayfair solicitor, not known to Hastings, who asked two questions.
1. “Does your wife own a house in west London?”
2. “If she does, does she know it had just been sold?”
The answers were a simple “yes” and “no”. The property, which had been rented out, had been sold by the tenant, who had re-let the property: the Mayfair solicitor was representing the lady who had, in return for the keys, handed over a cheque for £1.35m.
The victim, in this case, was the buyer, whose money had disappeared into a Dubai bank account. The sale had not been registered at the Land Registry, which was suspicious about the transaction, so the correct Mrs Hasting remained the legal owner.
It was a complicated scam, and would have been much more difficult to work if there had already been an existing charge (mortgage) on the property.
The report also stated that the Metropolitan Police had investigated many similar cases in recent months, including four where the criminals had successfully collected the cash intended for the property purchase.
The Met Police added that the fraudsters look for un-mortgaged properties, so no financial institution has an interest, and also select houses where the owners do not live locally.
Some of these scamming criminals are beginning to find themselves in court, and then behind bars.
In December, more than 80 people were convicted of the UK’s biggest “crash for cash” insurance scam after making more than £760,000 of bogus claims. The criminals faked 28 crashes and made false insurance claims.
The fraud was run by a family garage business in South Wales, as extended family and friends were enticed into the deception. A two-year investigation uncovered the bogus insurance claims, but it took another couple of years before all the accused were brought to justice.
Members of the family at the heart of the scam were jailed for two to six years. Ben Fletcher, director of the Insurance Fraud Bureau (IFB), added: “Crash for cash scams have a real impact on society, putting the lives of innocent people at risk and costing honest policy holders almost £350m each year.”
Another gang, apparently linked to Islamic State fighters in Syria, was recently convicted of a phone scam that managed to collect more than £600,000 from 18 elderly victims.
It’s a familiar scam with the fraudsters pretending to be the police, claiming the victim’s bank and credit cards are being used fraudulently, telling them to phone their bank and get the money transferred to a “safe” account.
But the criminals stay on the line, pose as bank officials, and get the victim to transfer the money into their own accounts. More than £23.6m was lost (or made) this way in 2014, to devastating effect in many cases.
The FFA has issued guidelines to try and make the fraudsters’ life a little more difficult. The important things to remember are that it takes two people (either end) to terminate a call, if in doubt use a different phone line or mobile, and contact your bank immediately if you think you’ve been stung.
Don’t worry about being embarrassed, silly or even wrong. It’s your money. Nobody is going to have a greater interest in protecting it than you.
:: Darren McKeever (dmckeever@ wwfp.net) is Northern Ireland adviser of Worldwide Financial Planning, which is authorised and regulated by the Financial Services Authority. For a free, no obligation initial chat about your individual finances, call 028 68632692, e-mail info@wwfp.net or click on www. wwfp.net. Follow us on Twitter: @WorldwideFP.
