12 signs you're being scammed

KeyboardI'm used to rip-off firms phoning me, offering dodgy investments. But this week, someone called to speak to my wife.

She was at work so I asked for details. He said she was an active investor and would be interested in what he could offer.
Calling my wife an active investor is somewhere between foolish flattery and fantastic falsehood. She has many interests but finance is not top of the list. Her limit is the occasional look at Nationwide's interest rates.

The guy promised to call back. So far, he has not bothered. But I did manage to wheedle some details out of him, and take a look at his website.

This phone call lasted one minute. Now the probability is you won't be called by this firm. However, its method of entrapping the unaware is the same as every other phone-based investment fraud, so it does not matter which one calls.

Taken from this, here are my top 12 killer signs of a scam.

A call out of the blue
You are phoned out of the blue by an organisation you have never heard of. They will pretend to know a lot about you, mostly by clever questioning. No genuine investment company ever calls in this way – it is a practice banned by regulators Financial Conduct Authority (FCA).

The phantom firm
There is no record of the firm on the FCA online register.

But look out for clones which simply steal an identity or near-clones where they use the name of a well known regulated organisation but change one or two details. In the past, there have firms with names such as Barclays NatWest or Prudential Goldman. They are not real – but their victims are.

No track record
The firm claims years of experience but it has just one director who has only been there for a few months. Would you trust a firm with no track record?

Stock photos and no details
Websites follow a pattern – they promise a lot but deliver no detail. They usually feature stock pictures – either City of London views or, a growing trend, photos of sport events. The implication is that rowers or rugby players show class, endurance and effort.

Nameless staff
They talk about "breadth of experience and skills" but the "our people" page has no names (unless they are cloned). Real companies show key staff, offering biographies.

Talk a good game
They overclaim - ludicrously. They talk about "a dedication to complying fully with the letter and spirit of the laws, rules and ethical principles that govern us. Our continued success depends upon unswerving adherence to this standard."

They have no intention of following any such standards.

Jack of all scams
They offer a wide range of "alternative" investments, featuring carbon credits, wine, gold, commodities, diamonds, property and other asset classes, promising expertise in all.

Now who in their right mind would expect the jeweller and the wine merchant on the high street to be one and the same? This variety is there to impress – at any one time, they are only flogging one item to victims, using a script which always stresses demand exceeding supply (whether true or not and it's usually not).

Copy and paste
They claim an investment "process with insight". But it is a platitude such as "making the right investment decisions requires a rigorous, reliable and transparent process". Well, it's hard to argue otherwise. Equally, "we know that research provides the backbone to any investment opportunity. Our leading research team provides forward-thinking market analysis and research on a range of asset classes, such as energy, precious metals, biofuels and real estate."

Note that this section includes assets which are not on the main page and introduces others. This is real copy and paste stuff.

Honestly, I'm honest
They emphasise they are trustworthy. A genuine company has no need to do this.

So stuff like "Core values are, and will continue to be, providing the highest calibre services and investments for our clients. In doing so, both integrity and trustworthiness are central to our business and our relationships."

HMRC warns about fake tax credits emails

New York, Paris, Peckham
The firm claims branches just about everywhere – New York, Paris, Tokyo, Hong Kong, Dubai, Frankfurt for starters. It is never explained what these foreign subsidiaries do or how to contact them. And that's because they don't exist.

A contact page with no-one to contact
The contact page has no names. But it may also feature basic mistakes such as the address of a head office in the City accompanied by a location map of Mayfair. They can't both be right. Always look at the address – it is invariably a maildrop or an office you can rent by the day (if not the hour).

Investing by PayPal
The website features a "payment page" where you can use your credit card or PayPal to send money. Don't.

Remember, scam firms don't have to fail on every one of my dozen points. Just one is enough to set alarm bells ringing.

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12 signs you're being scammed

More than 12 million pieces of personal information were illegally traded online by identity fraudsters in the first quarter of 2012 alone, according to data from Experian CreditExpert - outstripping the entire of 2010.

The vast majority (90%) of this illegally traded information is password and log in combinations - a result of the spiralling number of online accounts many of us now have. Research shows the average Brit uses around five different passwords online, but with an average of 26 different accounts each – this is nowhere near enough protection.

"Using a different password for each account will minimise risks, but if password information is stolen from a website, all accounts using the same details will be compromised, and this information can spread among fraudsters rapidly," warns Peter Turner, managing director at Experian Consumer Services in the UK and Ireland.

Step up your account protection with this guide to choosing a secure password.

Credit and store cards continue to prove particularly attractive to fraudsters and 2012 year has seen 73% surge in the takeover of plastic card accounts by criminals with nearly one quarter of all identity frauds, and 36% of all account takeovers, taking place on these cards.

Richard Hurley, communications manager at CIFAS explains the threat: "Whether it is through using an innocent party's details to open a new account in the victim's name, or hijacking the victim's details and taking over existing accounts, the modern fraudster will continue to pay specific attention to credit and store card accounts as an easy way of obtaining funds and goods, while leaving someone else to pick up the bill."

Be vigilant with your cards and follow our tips to protect your plastic through safe online shopping.

As if the mis-selling of payment protection insurance (PPI) wasn't scandal enough, 2012 has seen fraudsters preying on PPI victims. Consumers have received phone calls from someone who knows their name, announcing that they have won their PPI claim. The caller may also know the lender's name and an estimate of the loan amount.

However, the caller will then request a payment from the consumer in order to receive their compensation. This should signal warning bells, but many innocent victims have fallen for the scam and parted with money only for the bogus firm to disappear with their cash, and of course the compensation that never existed.

Consumers should be wary of all cold calls, particularly those that request cash upfront. There is no need to pay to make a claim for mis-sold PPI – you can claim direct to your bank for free and receive free advice from debt charities like Citizens Advice and the Consumer Credit Counselling Service.

If you do choose to take on the assistance of a claims management firm – never agree to an upfront payment. Reputable firms will only request payment for their services once you have received your compensation from your lender either by cheque or by payment into your bank account.

Phishing – when an unsolicited email arrives in your inbox requesting details to your personal accounts – continues to rise, leading to a surge in online banking fraud. Online banking fraud losses totaled £21.6 million during January to June 2012, according to CIFAS - a 28% increase on the 2011 half-year figure.

The emails trick customers into visiting fake banking websites – often made to look startlingly similar to the real thing - and disclosing their online banking login details. Online banking customers are also being tricked into divulging their bank login details and passwords over the phone to someone they believe is from their bank but is actually a fraudster.

The key point to remember is that banks will never contact you by phone or email and ask you to disclose your details, so always beware correspondence of this nature. Consumers should also be cautious of emails purporting to be from government bodies such as HMRC, or other financial accounts, such as Paypal.

There were over 50 different scams known to the 2012 Olympic Committee, with fraudsters cashing in on the good-natured spirit of the Games and nationwide scramble for tickets. The vast majority of scams took the form of phishing emails – purporting bogus job offers; prize draws; lottery wins and complimentary tickets – all with the sole purpose of duping consumers into sharing personal details or parting with cash in order to claim prizes.

Official tickets for the London 2012 Games were only available for purchase through the London 2012 website and appointed ticketing partners, so any other sources were offering fake or non-existent tickets. As for competition prizes and lottery wins – consumers should remember that it is impossible to win a competition or draw that you did not knowingly enter and that if a prize seems too be good to be true, it probably is.

Insurance is an incredibly complex area of personal finance and different forms of cover are riddled with different hitches that make it crucial to read the small print. Failure to do so could lead you to pay for a product you would be never be able to claim upon, or unknowingly do something that invalidates your claim.

Always buy the right level of cover for your needs and pay close attention to any exclusions in the policy wording. For example, many travel insurance policies for winter sports won't pay out for treatment of injuries incurred while under the influence of alcohol.

Surely the lowest of the low, charity donation fraud – when fake charities play on our sympathy by requesting donations to a worthy cause – is on the rise. Donation requests come in the form of unsolicited emails; phone calls; house visits or being approached in a public place. In many cases, donation requests are linked to a high-profile event, such as Hurricane Sandy that wreaked havoc across America last month.

Either the charity that the fraudster has asked you to donate to doesn't exist, or they are misusing the name of a genuine, often well-known, charity and pocketing your money.

Don't let fraud risks put you off donating – just make the necessary checks to ensure your money is going to the intended cause. Genuine charities are registered with the Charity Commission and print their registration details on all documentation, collection bags and envelopes, so check these details exist and if in doubt, contact the Charity Commission to confirm that they are authentic. Call the helpline on 0845 300 0218 or check the online charity register by visiting charity-commission.gov.uk.

Cases of cash machine fraud, where a device is used to trap money inside the ATM machine, have increased more than 15-fold in London in the past three months. Reported incidents have risen from 150 across the UK in May, to 2,500 in London alone in August, according to figures from Link and London's Dedicated Cheque and Plastic Crime Unit (DCPCU).

Criminals insert a device called a cash claw behind the guard on the cash drawer of an ATM. The device is undetectable to the public, who use the machine as normal until their cash fails to eject.

"The machine goes out of service and then the criminal comes along, forces open the drawer using a pair of pliers or a screwdriver, forces the device out of the cash machine, bringing the customer's money with it," explains Detective Chief Inspector Dave Carter, head of the DCPCU.

Customers are advised to immediately report any banknotes undelivered from cash machines.

Rogue property developers selling land that they claim has great investment value, when there is little or no chance of it ever being developed, are on the rise again this year. Investigations have lead to a number of convictions in 2012, yet consumers are warned to be remain wary of this big money scam.

Land banking involves plots of land offered for sale, often online, with the promise of sizable returns when planning permission is approved for housing or other development. Yet often the land is located in areas protected from development by planning law.

The companies involved soon disappear with investors' money and as the firms are not protected by the Financial Services Authority, their funds are not covered by the Financial Services Compensation Scheme.

In October, PhonepayPlus (the UK's premium rate telephone regulator) fined two firms a total of £450,000 for running a series of voucher scams on Facebook.

The scams, which claimed to offer free vouchers and supermarket gift cards for Tesco and Asda, resulted in members of the public signing-up for expensive premium-rate phone services.

The scams relied on Facebook users innocently sharing or liking the voucher promotions on their status, which included the promise of a voucher worth up to £250 for major retailers. After clicking on the promotion consumers were duped into participating in premium rate competitions, which involved questions sent to their phone at a cost of £5 each.

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