Legal

Protect yourself from

financial scams

© Which? Ltd 2016 This guide has been produced for general information and interest only. Which? makes every effort to ensure that the information in the guide is correct but we can’t guarantee that it is 100% free of inaccuracies, errors and omissions. The guide may not be reproduced, stored in a retrieval system, transmitted in any form or otherwise made available to third parties without the written permission of Richard Headland, Editor of Which? magazine. Commercial use of the guide is not permitted.

Have you been targeted by a scammer? If not, you’re in the minority – our research shows that more than one in two people have been on the end of an attempted scam, or they know someone who has – and there’s a good chance someone will target you in the future.

Scammers see changing technologies or new trends as their chance to exploit people. For example, the pension reforms introduced in April 2015 have spawned thousands of attempted frauds from conmen trying to cash in on people’s uncertainties about the new rules and what they should do with their savings.

However, it is possible to protect yourself. In this guide, we’ll talk you through some of the different scams out there and how to avoid them. We’ll give you the information you need to help you spot both existing and new scams for yourself. And we’ll tell you what you can do if you fear you’ve fallen prey to a scam.

Don’t be frightened by these fraudsters. With common sense and careful planning, we, as consumers, can stop them in their tracks.

Harry RoseEditor, Which? Money

Welcome04 Seven ways to spot a scam

06 Protect your pension savings

08 The trouble with pension ‘liberation’

10 How to avoid investment scams

12 Six scams to watch out for

14 Advice on avoiding the rogue advisers

16 Cracking the card crooks

18 Dealing with common card fraud problems

20 Stay safe online and on the move

22 Don’t panic if the worst happens

24 Who to contact and when

Contents

Which? Money carries no advertising, and our researchers do not accept corporate hospitality. So when we recommend a product, you can be confident it is because we genuinely believe it is the best. Our goal is to give you the knowledge to better understand and take control of your finances.

Seven ways to spot a scam

Scams are commonplace and becoming more so

by the day. More than half the Which? members

we surveyed say they have been targeted by a

scam over the past two years, or that they have

a friend or family member who has.

A scam is any scheme where individuals

try to obtain money or something else of

value from you dishonestly. That might mean

misleading you about the risk of an investment,

or it could be a more outright fraud. The victims

of scams may suffer serious financial loss, while

the emotional effect of being targeted in this

way can be upsetting.

That isn’t meant to scare you – just to prompt

you to take care and to be vigilant. The good

news is that there are all sorts of ways you can

protect yourself from the scam merchants –

even the more sophisticated ones. Above all, if

you can spot a scam – or a scheme that looks

as if it might be one – you can steer clear.

Scam spotAvoid falling for scams by asking yourself the

seven simple questions below. If you answer yes

to any of them, there’s a good chance it’s a scam.

1 Contacted out of the blue? An unsolicited

call can be a sign you don’t want to deal with

a company, although businesses do sometimes

call customers out of the blue for a legitimate

reason. If you are called, make sure you do

all you can to verify the identity of the caller. If

you’re not convinced of their identity, hang up

and contact the company from a different phone.

There are many instances where it’s best if

you are the person to instigate the first contact,

such as when you’re looking to make an

investment or for a new bank account or credit

card. If you’ve never dealt with the company

before, just hang up.

2 Is the deal too good to be true?

Scams will often promise high returns for

very little financial commitment. They may even

say that a deal is too good to miss. If a deal

sounds too good to be true, it usually is.

3 Asked to share personal details?

Never share your personal details with

anyone if you cannot validate they are who they

say. Phishing emails or phone scammers will

often try to get valuable personal data from you,

and they can use this to steal your identity or

your money.

Falling victim to a scam will cost you money and could be stressful, so look out for warning signs that can help you avoid one

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“ Never proceed unless you are absolutely certain your money will be safe ”

4 Pressurised to respond quickly?

Never proceed unless you are absolutely

certain your money will be safe. Once you

transfer it, it may be too late. Scammers will

often try to hurry your decision-making, but

a legitimate company will always give you

time and space to make an informed choice.

5 Are the contact details vague?

A PO Box address, premium-rate telephone

or mobile number can all be warning signs. If

anything goes wrong, it’s important you can

contact those involved.

6 Grammatical or spelling mistakes?

Legitimate organisations will rarely, if ever,

make glaring grammatical or spelling mistakes,

and, if so, they will usually be isolated incidents.

Scammers often use bad grammar and spelling

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? TipDon’t stay quiet. If you

suspect a scam, contact the relevant

watchdog (see pages 22–24), not

only so you can check out the

organisation for yourself, but also

to alert others.

on purpose to ensure only the most vulnerable

people will respond to their messages.

7 Are you asked to keep it quiet?

Being asked to keep something quiet should

always be a red flag. It’s vitally important

that you can discuss any financial agreements

with your family, independent advisers or friends,

so they can give a second opinion.

Protect your pension savingsCon artists can see the pension freedoms as a major opportunity to target billions of pounds in Britons’ pension plans

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“ No reputable pension adviser will cold call you and attempt to talk you into a pension review, let alone into transferring your money elsewhere ”

Get Pension Wise

The government’s Pension Wise service will outline your options following the pension changes, including income drawdown and annuities. You can book a phone session with someone from The Pensions Advisory Service or a face-to-face visit to a Citizens Advice Bureau. People aged 50 and over with a defined contribution pension are eligible. Call Pension Wise on 0300 330 1001 to book a consultation.

Pension freedoms The pension freedoms that came into effect in

April 2015 have created choices, allowing people

to make better use of their money in retirement,

and the reforms have been welcomed by many.

But, unfortunately, fraudsters are among the

beneficiaries – they see the flexibility that the

system now offers as a golden opportunity to

exploit people who aren’t sure what to do with

their pension savings. Since the pension rules

changed, regulators have received 10,000

reports of attempted scams.

‘Free pension review’ scamOne issue is that many people know that as

they approach age 55, they are entitled to free

guidance on how to make the most of their

retirement savings. Regulators have recently

warned against scammers exploiting these

changes by cold calling people and offering ‘free

pension reviews’, sometimes claiming to be from

the Money Advice Service, which does provide

much of the guidance available under the system.

These reviews try to persuade people to move

money saved in their existing pension to a self-

invested personal pension (Sipp), or in a small

self-administered scheme (a type of occupational

pension with fewer than 12 members).

The money is then typically invested in

unregulated investments such as overseas

property developments. Not only are the returns

on these unreliable, but the investments are

unregulated, so victims don’t have recourse

to the regulator or the Financial Ombudsman

Service if things go wrong.

There’s a pretty good chance of things going

wrong – but even if the investments these

pensions fraudsters sell don’t prove disastrous,

they take huge charges out of people’s savings

when transferring their money from their existing

pension arrangements.

Falling victim to a pension sting of this type

is likely to prove especially pernicious, since

there’s no time to make good your losses. The

fraudsters effectively condemn people who have

responsibly saved for themselves to a much

less comfortable retirement than they had every

right to expect. They may be left reliant on state

benefits and have little wealth left to pass on.

If in doubt, seek helpNo reputable pension adviser will cold call you

and attempt to talk you into a pension review, let

alone into transferring your money elsewhere. If

you receive such a call, hang up the phone.

If you do have doubts about an adviser, check

out their credentials with the Financial Conduct

Authority (fca.org.uk/consumers/financial-

services-products). You could also ask your

current pension provider whether it has had prior

dealings with such a firm – many scams have

been foiled by the intervention of pension

companies keen to protect their customers.

Pension freedom undoubtedly offers

opportunities, but to make the best of them,

most people need expert financial advice

from a specialist, who is extremely unlikely to

recommend high-risk or unregulated investments.

i Find out moreTo look for a registered and

authorised adviser consult unbiased.co.uk or Money Advice Service’s

retirement adviser directory at

moneyadviceservice.org.uk.

The trouble with pension ‘liberation’

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Pension liberation scams could see you stung by high charges and landed with a punitive tax bill. We explain how to avoid it

For many people, pension savings are by far

and away their most valuable asset – and there

are times when it can be frustrating that cash

is locked up in a pension plan that you can’t

access until you reach the age of 55. There

is a nasty and growing group of fraudsters

who know this all too well and are attempting

to cash in: the Financial Conduct Authority

says ‘pension liberation’ scams cost people

£9.1m just in the period between April and

August 2015.

The only advice to give here is to say that,

if you receive a call or text about pension

liberation, avoid it at all costs. These companies

get in touch, offering to unshackle the money

that’s tied up in your pension before you turn

55 – the earliest age you can access it. At best,

this is an extremely expensive way of getting

access to your pension savings and, at worst,

a major crime that could see you receiving

no money at all.

The pension liberation scamIt works like this. A pensions company sends

you a text saying something along the lines

of ‘Unlock the value of your frozen pension

and get cash back today’. You respond,

tempted by the idea of getting hold of the

thousands of pounds that you’ve saved over

the years, and you get a call from the company

saying that it will do the legwork for you.

Such firms may offer a cash incentive or

loan to move your money to another scheme,

or offer to get all of your pension savings

straight away. But you’ll be charged a hefty

‘arrangement fee’ for doing this – somewhere

between 10% and 30% of the size of your

pension fund. Moreover, what the companies

often don’t tell you is that there’s an enormous

tax charge for accessing your pension early –

55% of the money you take out.

So, if you were looking to ‘liberate’ £100,000

from your pension, you might end up having

to shell out £30,000 in fees to the company,

leaving you with £70,000. A couple of weeks

later, you’ll get a letter from HM Revenue &

Customs (HMRC) demanding 55% – not of

what you’ve got left, but of what was originally

in your pension. So you have to pay another

£55,000 – leaving you with just £15,000.

That’s an 85% hit to get early access.

“ The Financial Conduct Authority says ‘pension liberation’ scams cost people £9.1m just in the period between April and August 2015 ”

which.co.uk ❘ 9

Go further

The simple way to avoid being caught out by pension liberation con artists is to refuse to have anything to do with this sort of activity.

Which? members can call the Which? Money Helpline, who can help you understand your pension options. They have fielded numerous calls on these issues over the past year. Visit which.co.uk/helpline for more information.

There are no loopholes that will help

you escape this trap. Pension liberation

companies are full of tall stories about

elaborate arrangements that will enable

you to get round the tax charge – none

of them actually work. In the worst case,

you may not see your pension savings

at all.

vast majority of cases, an investment business

must be formally regulated by the Financial

Conduct Authority (FCA) in order to work

with the public. You can check up on a firm

by making a quick call to the FCA, or consulting

its website (see box, below).

Businesses regulated by the FCA have to

comply with the regulator’s rules about how

customers should be informed of the risks

and opportunities in every investment. And, if

something does go wrong, you will usually

have recourse to the Financial Ombudsman

Service, an independent complaints service,

and the Financial Services Compensation

Scheme, which pays redress to victims of

company failures.

There are a small number of unregulated

investments, where businesses offering them

do not have to comply with the FCA rules.

These are best avoided unless you really

If something looks too good to be true, it almost

certainly is. That should be your golden rule

when it comes to considering investments

(legitimate or otherwise). Treat anyone who

offers you an investment scheme promising

higher returns than you could earn from a bank

or building society with suspicion – all the more

so if they tell you these returns are guaranteed.

Your response to such pledges should be to

hang up the phone and to walk away.

However, lots of people get caught out.

Investment fraudsters are often polished

salespeople who use sophisticated tactics

to take in their victims. They are going to

extraordinary lengths to appear legitimate –

and the result is that UK investors are losing

£1.2bn to investment fraud every year, according

to official estimates.

Scammers are likely to have done their

homework on you, accessing publicly available

material to make it sound as if they’re a

reputable financial services company that

you might have had dealings with in the past.

They’ll use a respectable name and address

to seem more credible, and they’ll talk in

reassuring terms designed to calm your nerves

– they’ll attempt to draw you into the scam

slowly, often making repeated approaches

before asking you for money.

Do your own homeworkThe good news is that there’s a relatively simple

way to spot a scam before it is too late. In the

How to avoid investment scamsInvestment scams are very common, but you can dodge them by dealing only with properly regulated firms

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are a sophisticated investor with detailed

knowledge of the investment in question –

almost everyone else should steer clear.

On the following pages, we detail some of

the most common investment scams of recent

years, but it’s important to stress that fraudsters

are continually reinventing themselves and

which.co.uk ❘ 11

i Find out moreThe Financial Conduct

Authority continually updates the

Financial Services Register, its list of

authorised investment firms. You can

check whether a business is on it at

fca.org.uk/register, or by calling

0800 111 6768. The FCA also compiles

information about common scams

and the organisations behind them.

“ UK investors are losing £1.2bn

to investment fraud every year,

according to official estimates ”

finding new ways to exploit people. If you

get a cold call from someone offering you an

investment – however plausible and attractive

it may sound – hang up at once. And every

time you deal with any kind of investment

company, check that it is properly regulated

by the FCA.

These con tricks are common ploys to watch out for. It’s not an exhaustive list though, as new investment scams crop up all the time, so look out for new tricks

Six scams to watch out for

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1 Boiler room scams Bogus stockbrokers

offer to buy or sell shares with the promise of

big returns – only for victims to discover shares

are worthless or non-existent. These scammers

are often based in ‘boiler rooms’ abroad; they

cold call novice and experienced investors after

taking phone numbers from public shareholder

lists. Using high-pressure sales techniques,

professional-sounding stockbrokers may offer

free research reports into a company you hold

shares in, a gift or discount on dealing charges,

or ‘secret’ stock tips. You’ll be pressured into

quick decisions. Remember, the FCA regulates

stockbrokers in the UK, and authorised firms are

unlikely to cold call you. Offers to buy shares you

already own at above market value will be bogus.

2 Carbon credit cheats A carbon credit

is a generic term used for certificates

or permits allowing carbon dioxide (CO2)

emissions. When sold to a casual investor,

they’re very unlikely to be able to sell or trade

them, but salespeople cold call investors, or

contact them by email, post or at a seminar.

You may be offered carbon credit certificates,

voluntary emission reductions (VERs), certified

emission reductions (CERs) or an opportunity

to invest in ‘green’ schemes or projects that

generate carbon credits as a return on your

investment. Often, the salesman will say

that carbon credits are ‘certified’, but this

‘certification’ isn’t recognised by any UK

compensation scheme.

3 Dodgy diamonds Investors are sold

diamonds that are either overpriced or not

a good investment. Cold callers encourage

investors to part with thousands of pounds

by insisting diamonds, especially coloured

ones, will provide attractive returns. Often,

the diamonds will be overvalued. And some

fraudsters may advise investing in stones that

don’t even exist. There is no comeback, since

this is not a regulated business.

4 Fine wine fraud Investors are talked into

buying bottles, cases or barrels of ‘fine

wine’ that are either overpriced or don’t exist.

Brochures are sent out, and callers promise

‘guaranteed profits’ and ‘fast returns’, while

using high-pressure sales tactics. This type

of investment activity should only be promoted

to sophisticated investors with a lot of money

to invest. Some scammers may have just

a small amount of stock, while others don’t

have any at all. Some have been known to

try passing off cheap plonk as fine wine.

5 Commercial property problems

A commercial property-related scheme

might offer you an investment in a car parking

space, self-storage warehouse or similar asset.

These schemes are likely to fall outside Financial

Conduct Authority rules on investment funds

if you are encouraged to buy a small piece of

property outright, rather than a share in a larger

development. The ‘guaranteed’ returns may

not be outlandish, but because these schemes

are unregulated there’s little to ensure there’s

a realistic plan to protect your money and

underwrite the guarantee. Steer clear unless

you’re a investor with experience in this area.

6 Cloning cons A clone firm will mimic

a genuine, authorised investment firm,

perhaps using a slight variation of the real

company’s name. It will aim to convince you to

sink your money into its fake investment fund,

exploiting the reputation of the real company.

These illicit schemes often cold call, even if

you’re registered with the Telephone Preference

Service. They look for victims who can be talked

in to making a bank transfer without doing the

checks that could reveal the scam. Trading

Standards has seen a rise in cold callers claiming

to be from the Telephone Preference Service

who then try to charge for registration or call

blocking. See which.co.uk/scams2016 for more.

Check them out

Remember, authorised investment firms are regulated by the Financial Conduct Authority. Tread very carefully before doing business with any firm not authorised by the FCA – you will have little protection. Visit fca.org.uk for more information.

Financial advisers are well regulated, highly qualified and very professional – but con-men pretending to be authorised to offer advice will lack these qualities

Advice on avoiding the rogue advisers

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Not so friendlyIt might seem natural to accept financial advice from a friend or neighbour – but unless they’re properly authorised as financial advisers, they shouldn’t be working with you in any kind of

Authorised advisersGetting good, independent financial advice is

crucial when planning your personal finances.

But how do you know that the person giving

you that advice knows what they’re talking about;

that when they take your money, it will end up

in the savings and investment products on which

you agreed?

by postcode. In both cases, only properly

authorised advisers should be on the list.

Even so – and whenever you’re dealing

with a new adviser – it makes sense to check

the FCA’s register of firms it has given a licence

(see fca.org.uk/register or call 0800 111 6768).

If a firm purporting to be a financial adviser is

not on this register, end all dealings with it at

once and tell the regulator.

If you are cold called by a financial services

firm that appears to be on the register, double-

check by calling them directly on the number

that the FCA has for them. It may also be useful

to consult the list of unauthorised firms that the

FCA knows about. The regulator lists con artists

it has become aware of on its website, in an

attempt to make people aware of them.

Don’t be afraid to ask searching questions

of your financial advisers. Key questions

could include some of the following: what

qualifications do they have, what practical

experience do they bring, and can they

provide references from satisfied customers.

Competent, registered advisers should not

struggle with any of these questions.

professional capacity, and they certainly shouldn’t be taking your money. Unfortunately, there have been many cases of people losing out to people they knew and trusted.

To be sure, you must deal only with properly

authorised advisers. There was a time when

anyone could call themselves a financial

adviser. Not today – there are now very strict

rules about who can offer financial advice to

the public. And while there are different types

of financial adviser in the profession, all of them

must be registered with the Financial Conduct

Authority. To obtain that registration, they will

have had to earn professional qualifications,

submit to financial checks and agree to abide

by the regulator’s rules on how to do business

– including how to charge their customers.

Any financial adviser who attempts to offer

you their services but who isn’t authorised to

do so by the FCA is breaking the law. They’re

operating a fraud simply by working as an

unregistered financial adviser – and there’s

every chance you’ll suffer at their hands, either

through incompetence or in an outright fraud.

Importantly, authorised firms operate under

very strict rules, requiring them to keep clients’

money absolutely separate from their own

finances. This means that if they suffer financial

problems, your money shouldn’t be at risk.

Finding the right adviserIf you don’t already have a financial adviser,

the Which? Local service can help you to find

an adviser in your area – as recommended

by Which? members (visit local.which.co.uk).

Alternatively, unbiased.co.uk is an online

directory that allows you to find advisers

Debit and credit cards are highly attractive to financial fraudsters, so you need to be aware of the several different ways scammers can target people

Cracking the card crooks

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Card fraud is worryingly commonplace. Four

in ten Which? members surveyed have been

in the unnerving position of having their credit

or debit card compromised. And as spending

on cards has increased – now accounting for

three in every four pounds spent in shops –

so has fraud. Figures from groups such as

Financial Fraud Action UK show that fraud

losses on UK cards run into hundreds of

millions of pounds each year.

The good news is that your bank has to

refund fraudulent payments immediately,

so you shouldn’t be left out of pocket.

But Which? research suggests this doesn’t

always happen as quickly as it should. The

better option is to avoid falling victim in the

first place – start by familiarising yourself with

the most common cons.

■ Remote purchase fraud Also known as ‘card

not present’ fraud, this is the most common card

scam. It occurs when card details are fraudulently

obtained (for example, through a virus on your

computer or phishing emails) and used to buy

things online, on the phone, or by mail order.

■ Lost or stolen card fraud This type of fraud

occurs on cards reported lost or stolen by the

cardholder. Lost or stolen cards can still be used

online, over the phone or in shops that don’t

have chip and Pin. They can be used more

widely if the criminal has ‘shoulder surfed’ the

Pin (seen it while you entered it) before taking

the card. The same applies to cases where the

cardholder has written down their Pin and kept

it in a purse or wallet that has also been stolen.

■ Counterfeit-card fraud The amount of money

lost through counterfeit card fraud – where a

fake card is created using the magnetic stripe

details of a genuine card – has dropped 75%

since its peak in 2008, thanks to the success

of chip and Pin. Cases of counterfeit fraud are

now more likely to involve either foreign cards

that don’t have this technology being used in UK

stores, or UK cards being used abroad where

chip and Pin hasn’t yet been introduced – in

the USA, for example.

Expert tipsRemain vigilant in order to reduce the risk of

being caught out by one of these frauds. Our

experts’ tips, from industry pundits and police

advisers, may also help:

1 Alarm bells If someone calls or emails asking

for something out of the ordinary, then alarm

bells should ring. Make sure you never give out

your Pin – neither your bank nor the police will

ever call to ask you for it, or ask to collect your

card. Illicit schemes have little compunction

about cold calling, even if you’re registered with

the Telephone Preference Service (see page 13).

They’ll be looking for victims who can be talked

into making a bank transfer without making the

checks that could reveal the scam.

2 Beware of calls from fraudsters posing as

bank staff (a common ploy is to claim to

be from the bank’s fraud department). If you’re

asked to ring them back, use a mobile to call

your landline first to check the line has been

disconnected and the fraudsters aren’t still on

the other end, or use another phone.

3 Install anti-virus software and anti-spyware from a trusted company on your

computer to detect and remove malware, then

run them at regular intervals.

4 Check your transactions regularly to

make sure everything looks familiar. Card

providers will also keep an eye on spending

patterns and flag unusual activity.

If you do suspect you may have fallen prey to card fraud, or that you’re at risk, take action quickly to protect yourself and mitigate possible losses

Dealing with common card fraud issues

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Even the most careful debit and credit

card holders can be caught out. But if you

act quickly, you may be able to prevent

the fraudsters from cashing in. At the very

least, though, you’ll give your bank every

reason to treat your case sympathetically

and to refund your losses.

Q What do I do if I think my cards have been compromised?

A If you’ve lost your cards or think they’ve

may have been compromised in some

way, it’s vital to call your card providers as

quickly as possible, so that the cards can be

cancelled. You’ll find their contact details on

your statements.

Q Who should I contact if I’ve been defrauded?

A If you discover fraudulent transactions on

your account, contact your bank or card

provider first.

There’s no need to go to the police unless

another crime has been committed alongside

the fraud – for example, if your wallet was

stolen. You can be confident the bank will

pass the case to the police and that it will

be acted on.

Q What if I’ve been tricked into handing over my details?

A Scams involving cardholders getting a

call from someone claiming to be from

their bank or the police are becoming more

common. The fraudster will attempt to dupe

you into revealing your Pin and handing over

your debit or credit card – they may even

send a courier to pick it up. There are people

who have lost thousands of pounds in this

way, even though the fraudsters may have

used your card and Pin without your

authorisation.

These frauds are treated on a case-by-

case basis and there is no guarantee you’ll

get your money back. If you fear you’ve been

compromised, contact your bank immediately.

Q Can I be defrauded if I have a contactless card?

A Contactless technology, which allows you

to make payments by tapping your card

on a reader, has been the source of a number

of security concerns in recent years. For now,

however, contactless fraud is rare – although,

as payment technology develops, potential

fraud in this area is being closely monitored.

If you have concerns, speak to your bank.

Talk to your card providersDebit and credit card providers are on the alert for suspicious payments – transactions from locations where you don’t normally spend money, for example, or a particularly sizeable amount of spending.

In many ways, this proactive stance is to their credit, but it can also cause you problems. Holidaymakers may find their cards turned

down when they are overseas, for example, or it may sometimes be difficult to pay for a large one-off transaction.

To reduce the risk of such a problem, keep your card providers in the loop – call them before you’re going on holiday to let them know, for example, or let them know if you’re planning an unusually large purchase.

“ Keep your card providers in the loop – tell them when you’re going on holiday, or if you’re planning an unusually large purchase ”

Q What do I do if I’m refused a refund?

A In the first instance, you should ask for

your complaint to be escalated through

your provider’s internal complaints process.

If your bank’s decision on a refund is final,

ask it to issue you with a final letter of deadlock

so that you can refer your claim to the Financial

Ombudsman Service (FOS). Visit financial-

ombudsman.org.uk for further information.

Online and mobile banking make life convenient, but take precautions against fraudsters to keep your finances secure

Stay safe online and on the move

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Britons are using online banking in record

numbers – logging in 9.6 million times a day.

Fraudsters are changing their attack methods

to keep up with the online demand, with

criminals combining more widely known

phishing (email) and vishing (cold call)

scams with online banking attacks, such

as installing malware.

is where they will try to dupe you into handing

over security details or money. Never make a

transaction on a site that you don’t fully trust,

and look out for tell-tale signs such as odd web

addresses, poor-quality design, and spelling

and grammar mistakes. Type in your bank’s

URL directly yourself.

All of these warnings apply just as strongly if

you’re one of the growing number of people

who now uses apps on a smartphone or tablet

for mobile banking. All the banks say they have

sophisticated systems in place to prevent app

hacking, and that it is no less safe than online

banking, but you still need to be vigilant.

One extra tip is to set a passcode to unlock

your phone. This way, if your mobile is stolen,

fraudsters will have to find a way past this to

access your mobile banking apps, as well as

the log-in passwords these apps require to

access your information.

“ Opt for longer and more complex passwords, mixing letters and numbers, and avoid choosing options that someone could guess from your social media profile ”

i Find out more■ Bank online safely:

which.co.uk/banksafe■ Which? members can access

antivirus software reviews:

which.co.uk/antivirus■ Best bank accounts: which.co.uk/banksatisfaction

Increasingly sophisticated online attacks

present banks with a hard task to manage.

Yet we rely on them to safeguard our funds

and should expect there to be strong security

measures in place. Which? research suggests

that the banks are generally doing a good

job, but you can also take simple the following

steps to protect yourself.

■ Don’t be the weak link No matter how good

your bank’s security is, it could be let down if

you have weak usernames or passwords, or if

you write down these passwords or share them

with others. Opt for longer and more complex

passwords – at the very least mixing letters and

numbers – and avoid choosing options that

someone could guess from your social media

profile, such as a pet’s name. And keep security

software up to date to protect your computer

from malicious attacks.

■ Take care with wi-fi Sophisticated crooks may

be able to get into your bank account by piggy-

backing on your wi-fi connection when you’re

banking online. At home, make sure your wi-fi is

password protected and try not to access online

banking via public wi-fi services, particularly in

crowded venues such as coffee shops.

■ Report suspicious activity As long as the

bank can’t prove you’ve acted fraudulently or

been grossly negligent, it must refund you for

fraud that results from a criminal gaining access

to your online account – the most you could

be liable for is £50. But losses from fraud

affect us all indirectly via costs to the industry

that they’ll pass on in other ways. Letting your

bank know quickly if you suspect a problem

can minimise how much money, if any, is lost.

■ Reject emails and calls from your bank Phishers/vishers can be convincing. Never click

on links unless you’re sure an email is genuine.

If you’ve been called and want to call your bank

back, wait a while or use a different phone –

some scammers hang on the line while you dial

the real number, so you think you’re through to

your bank when you’re actually still speaking to

the fraudster. Your bank will never ask for your

full Pin or password over the phone or via email.

■ Look out for fake bank sites Fraudsters’

emails will often direct you to a fake site set

up by con men pretending to be your bank – this

22 ❘ which.co.uk which.co.uk ❘ 23

don’t need to – but if you do want to talk to the

police direct, contact your local police station

(although don’t use the 999 number, which is for

emergencies only).

For scams in areas of financial services that

are regulated – pensions and investments,

for example – you should also talk to the

Financial Conduct Authority (0800 111 6768). It

is responsible for policing the activities of most

financial businesses. And if you’re contacted by a

clone company that is attempting to pass itself off

as a bona fide business, you should get in touch

with the real company to let it know.

Finally, Trading Standards sometimes gets

involved with disputes over products and

services not supplied as promised – you can

contact them via the Citizens Advice consumer

helpline on 0345 404 0506.

Dealing with bank fraudMost banks are sympathetic when customers

fall victim to fraud. But it’s important to know your

If you fear you have fallen victim to a scam

– or you know you have – don’t panic. By acting

quickly and contacting the right organisations,

you may be able to prevent or limit losses – and

possibly even ensure the scam merchants are

eventually caught.

Crucially, any fraud related to your bank

account or credit card should be reported to the

provider as soon as possible. Unless you have

been negligent, you should be able to recover

most losses you suffer from these firms, but

they expect you to act fast, so that they can take

action to limit your losses. Don’t wait to take

action until you’re sure you’ve been targeted –

get cards and accounts frozen straight away.

Frauds of this type don’t normally have to

be reported to the police – your bank or card

company will take responsibility for liaising with

the authorities. In other cases, however, you will

need to report the scam.

Reporting the fraud

Unless your bank tells you otherwise, you should

report frauds. Your first point of contact for any

fraud is Action Fraud, the UK’s national fraud and

cyber crime reporting centre. It is a central point

of contact for fraud and financially motivated

internet crime and has an online reporting tool; or

you can speak to an adviser on 0300 123 2040.

After reporting a scam, you’ll get a national crime

reference number, and the case will be referred

to the National Fraud Intelligence Bureau.

Action Fraud liaises with the police so you

Don’t panic if the worst happensTake action quickly to limit your losses and alert others if you do fall victim to a suspected scam

rights. Above all, you don’t have to prove your

innocence to the provider – the burden of

proof lies with the bank.

While you may have to pay the first £50 if

your card was lost or stolen, under the Payment

Services Regulations, you’re liable for the full

amount only if the bank has evidence you

authorised the transaction or acted fraudulently

or with ‘gross negligence’ – for example carrying

your Pin and card together in your wallet.

The rules for credit cards, covered by the

Consumer Credit Act, are similar. The law states

that your liability is generally limited to £50 if a

card was used without your permission. Gross

negligence isn’t specifically addressed, but the

Financial Ombudsman Service says that unless

your provider can prove that you authorised the

payment, you should get all but £50 back –

even if you were careless.

Providers take a harder line when the correct

Pin is used at a payment terminal, because the

system should protect against cloning and stolen

Section 75 can be your friend

Section 75 of the Consumer Credit Act 1974 can make credit card providers jointly liable for breaches of contract or ‘misrepresentations’ by a trader when you paid using your card. This means you shouldn’t be left out of pocket if an item you’ve ordered is faulty, the retailer goes out of business or it doesn’t deliver what it promised.

card abuse – but they can’t automatically refuse

refunds. Using the correct Pin isn’t solid proof

of complicit fraud or gross negligence.

Similarly, while it’s more difficult to get a

refund after phishing or vishing scams, it’s not

impossible. If you’re unhappy with your financial

provider’s decision, you can take your case to

the Ombudsman.

“ The law states that your liability is generally limited to £50 if a card was used without your permission ”

If you suspect you’ve been the victim of a scam, who do you contact? We’ve pulled together the key contacts below

Who to contact and when

■ Action Fraud The UK’s national fraud reporting centre for fraud

and financially motivated internet crime. They

have an online reporting tool, or you can call and

speak to an adviser.

actionfraud.police.uk 0300 123 2040

■ Citizens Advice The Citizens Advice website provides some

information on dealing with scams, and you can

also call to speak to

an adviser.

citizensadvice.org.uk/consumer/scams/scams/ 0345 404 0506

■ Financial Conduct Authority (FCA) The FCA is responsible for policing and

regulating the activities of financial businesses.

Their website provides information on avoiding

and reporting scams. They also publish a list

of authorised firms and the firms that are

unauthorised and should be avoided.

fca.org.uk/consumers/scams 0800 111 6768

■ National Fraud Intelligence Bureau (NFIB) When you report a fraud to Action Fraud, you

are given a police crime reference number and

your case will be referred on to the National

Fraud Intelligence Bureau, which is run by the

police service. See Action Fraud, opposite,

for contact details.

■ National Trading StandardsTrading standards have enforcement powers

to pursue scam operators – informed by Action

Fraud. They can also get involved in disputes

over products and services not supplied

as agreed.

nationaltradingstandards.uk 0345 404 0506 (via Citizen’s Advice consumer helpline)

■ Telephone Preference Service (TPS) The TPS is a central opt-out register allowing

people to register their wish not to receive

unsolicited sales and marketing telephone

calls. Note that Trading Standards has seen a

rise in cold callers claiming to be from the

Telephone Preference Service who then try

to charge for registration or call blocking.

See page 13 for more on this.

tpsonline.org.uk 0345 070 0707