Victims of scams lose £6 billion a year
Lists of targets – which scammers call 'suckers lists' – are like a fraudster's phone book and are often traded between firms trying to con people out of their money. Almost 30% of people polled by consumer champion Which? who have been scammed said they were caught out by schemes claiming their bank accounts or computers had been compromised. Find out how these scams work and how to avoid them.
A simple rule of thumb is: if it sounds too good to be true, it probably is!
In recent months the Financial Services Authority has written to 76,732 people to warn them that their name and contact details appear on lists used by fraudsters. As part of Operation Bexley, the City watchdog found several lists with names and address of people who may be targeted by fraudsters offering unauthorised investment services.
The offer may be to buy or sell shares, or purchase a plot of land, but it is a scam and investors are likely to lose their money. More on the FSA's website.
Fraudsters target victims through criminal syndicates who generate email lists, sometimes comprising up to 10 million names. Only a few responses are needed for the fraudsters to succeed. 'Sucker lists' are then compiled from the details of people who've responded to scams in the past and are therefore considered an easy target. The best way to avoid getting on these lists is by not responding to any unsolicited emails or calls.
When dealing with a financial firm or individual, check that they are regulated by the FSA on its register. And here is a list of unauthorised firms and individuals.
The FSA has also drawn up this list: Top ten tips to protect your savings.
Other common scams include:
Banking scams: a call pretending to be from a person's bank saying their account has been hacked, and a courier is being sent to collect their bank cards. They are told to ring their bank helpline, but the scammer doesn't hang up and plays a dial tone. The victim, thinking they are talking to their bank, is then asked for their PIN number, before their cards are collected.
Lottery scams: An email telling someone they have won $540,000 in a US lottery, even though they haven't purchased a ticket, and asking for bank details to receive the prize. And an organisation calling itself the 'International Monetary Fund' promising an $8m windfall, if £960 is paid to release the funds.
Security scams: a message claiming to be from the Metropolitan and Strathclyde Police saying that pornography has been detected on a person's computer and they have to pay £100 to unlock it.
Which? has compiled a checklist of seven ways to spot a scam.
It could be a con if:
1. You were contacted out of the blue;
2. The deal seems too good to be true;
3. You have been asked to give personal or financial details or pay an upfront fee;
4. You are under pressure to respond quickly;
5. The contact details are vague, for example a PO Box or premium rate number;
6. The correspondence contains glaring grammatical or spelling mistakes; or
7. You have been asked to keep the matter confidential.
Which? executive director Richard Lloyd said: "Some scams are very sophisticated and tricky to spot but the golden rule is always if something sounds too good to be true, it probably is.
"Your personal and financial details are precious so if in doubt, double-check exactly who you are dealing with before giving anything away."
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