Numbers falling for credit card PIN scam rocket

WalletA telephone-based scam, aimed at fooling victims into revealing their PIN, has grown significantly this year according to figures from Financial Fraud Action UK and the UK Cards Association.

The scam has caused more than £7.5 million worth of fraud on credit and debit cards in the first eight months of the year, with more than 1,600 people falling victim.
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What's interesting is just how prevalent this scam has become. The money taken by fraudsters up to August is already ten times the amount stolen through this method in all of 2011!

How the scam works

The fraudster calls you, posing as someone from your bank, or perhaps the police. They claim that there has been fraud on your account and so your card will need to be collected and replaced.

The police have suggested that fraudsters may attempt to win your confidence by convincing you to hang up and call the bank for confirmation. However, they stay on the line and pose as a bank representative.

The fraudsters will either ask for your PIN or ask you to key the PIN into your telephone keypad before sending a courier to collect the card. As you've guessed by now, the card is actually collected (along with the PIN) by one of the scammers.

Who the scam is targeting

It will come as no surprise that it's the elderly and vulnerable who are most likely to fall prey to this scam. The average age of victims is 69, with particular hotspots in London, Surrey and Strathclyde.

What's scary is that Financial Fraud Action's research has found that more than one in ten do not realise they should never reveal their PIN to anyone.

So while you may be a bit more savvy and unlikely to be caught out by a scam like this, it's worth making sure that any older or vulnerable people in your family or friends are aware that a PIN is not something to be handed out to anyone.

A couple of other things to bear in mind:
  • Your bank will never ask you for your PIN
  • Your bank will never ring you to say they will come to your home to collect your card
  • You should always ensure you can hear a dial tone before calling your bank, and make sure you do so on an advertised number.

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Numbers falling for credit card PIN scam rocket

Figures from charity Age UK show that 29% of those over 60 feel uncertain or negative about their current financial situation - with millions facing poverty and hardship.

Even though saving for retirement is not much fun, the message is therefore that having to rely on dwindling state benefits in retirement is even less so.

To avoid ending up in this situation, adviser Hargreaves Lansdown recommends saving a proportion of your salary equal to half your age at the time of starting a pension.

In other words, if you are 30 when you start a pension, you should put in 15% throughout your working life. If you start at 24, saving 12% of your salary a year should produce a similar return.

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