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More than one in 10 UK adults admit to having lost money to a financial scam, according to new research at the start of Scams Awareness Week, losing more than £1,000 on average.
New research by guidance and financial education provider Wealth at Work found 12% of UK adults, potentially 6.2m people, have admitted to losing money to a financial scam in the last year, with the average amount being more than £1,000. This is despite almost three-quarters (72%) saying they are confident in their ability to identify a financial scam.
The research, published at the start of National Scams Awareness Week by Citizens Advice, also found that a third (34%) of victims lost money to two or more types of scams.
Losing money to a financial scam means 40% now find it difficult to trust that any financial information is legitimate, while almost a quarter (24%) do not feel safe investing their money.
More than a fifth (22%) have had to change their plans for the future as a result of losing money to scam, and 27% say it has had a negative impact on their mental health.
Wealth at Work lists as common financial scams that people lost money to in the last year:
Purchase scam – 27% of victims lost money through the sale of fake products or goods online.
Investment scam – 19% fell victim to scams that encourage investing in fake opportunities or pyramid schemes.
Friends or family scam – 18% said they were sent messages by scammers claiming to be someone they knew and asking for money.
Bank account scam – 18% said it was through fake claims that their account had been compromised.
Tech support scam – 15% lost money through fake technical support services, used to obtain personal details.
Befriending/romance scam – 14% cited scams where a scammer pretends to become your friend, then asks for money.
Pensions scam – 13% said it was through fake promises of guaranteed returns or early access to their pension.
Tax refund scam – 10% said it was through fake promises of tax rebates.
Lottery scam – 9% said it was through fake claims that they had won a prize
“Financial scamming is rife, and it’s shocking that many people have lost money not just once, but multiple times to scams,” said Jonathan Watts-Lay, director of Wealth at Work.
“Many of these scams look completely legitimate and are not easy to spot. People often get seduced by the promise of investment returns which are too good to be true.”
He said scammers might have obtained some personal details already and often have professional looking websites and literature that makes it hard to distinguish from the genuine article, using contact methods like social media, texts, telephone calls and emails.
Phone companies should help by blocking any offending numbers, he added, and email providers can help block emails from specific senders.
He also reminded people to be aware of what they share through social media and ensure they have the right privacy settings.
Those approaching retirement could be targets for scammers, he explained, as they could have access to relatively large sums of money.
“We would encourage people to follow the three-step approach of the national ‘Take Five’ campaign by UK Finance,” Watts-Lay said. “The campaign urges individuals to stop and think before parting with money, challenge if something is fake, and protect their money by contacting their bank if they think they’ve fallen for a scam.”
He also urged people to check if a company is registered with the Financial Conduct Authority, and to report scams on the FCA’s ScamSmart website.
“Employers play an important role in supporting the financial wellbeing of their employees, and helping them to protect their money from scams throughout their career and at retirement is key,” he added.
Citizens Advice noted that scammers are also using artificial intelligence. The South West Surrey branch has published its top three tips to consumers:
Don’t be rushed to sign up to financial opportunities, even if you think you might miss out on a good deal.
Do not provide personal details or bank details straight away.
The Financial Services Register can confirm if companies or individuals are legitimate.
Consumer organisation Which? previously found that between April 2020 and March 2021, people lost £535m just on investment scams, of which the majority happened online. The Online Safety Act received Royal Assent a year ago. Focussed on matters of child protection and terrorism, the government was at first reluctant to include fraudulent online adverts, but eventually ceded to pressure from a coalition including the City of London police and the Association of British Insurers, as well as the Financial Conduct Authority, several MPs and consumer champion Martin Lewis.
The Pensions Regulator and the Pension Scams Industry Group introduced a pension scams pledge in 2020, asking trustees, administrators and providers to publicly commit to combatting scams. They were also challenged to educate themselves about current and emerging scam tactics and adopt best practice when it comes to transfer due diligence.
What else should be done to tackle financial scams?
