Nine million people in the UK have fallen victim to financial scams in the past year, new figures suggest.
An estimated 3 million people were affected by fake debt advice on social media, with a further 5 million losing money over friend-in-need and pension scams.
Citizens Advice surveyed consumers across the country in the year to Aug. 26, revealing that 18 percent of adults reported experiencing at least one financial scam.
The charity has warned of scammers using investments and parking QR code fraud to convince people to move into a fictitious fund or placing bogus QR code stickers over genuine codes at car parks.
These two types of scams affected an estimated 5 million people in the past year. Consumers were directed to fake payment websites, where their personal and financial information would be stolen. Consumers would also fall victim to fake investments, including gold, property, carbon, cryptocurrencies, or even wine.
Dame Clare Moriarty, chief executive of Citizens Advice, said it is particularly worrying to see the impact on people’s finances afterwards, “especially if they have to borrow to get by.”
One man who contacted Citizens Advice said he fell victim to trading and cryptocurrency scams, which left him “frantic and traumatised.” After watching an online tutorial about a legitimate trading system, he followed an advert leading to a fake platform run by scammers.
“After I started putting money into the ‘trading system,' I immediately got aggressive phone calls several times a day, saying: ‘You’ve got to keep trading or you’ll lose everything.’ Any requests to withdraw my money were ignored.
“I’d never experienced such disastrous financial trouble like this in the past. I’d paid off my mortgage and had a nice house, a family home. I had no clue that you could so easily lose all that almost overnight,” he told the charity.
Over 76 percent of the fraud was conducted through social media sites, the charity reported.
Lord Michael Bichard, chair of National Trading Standards, warned about the use of social media by scammers and urged victims to report fraud, so that criminals can be stopped “in their tracks.”
Top Tips and Advice
Citizens Advice issued a number of recommendations for consumers to raise awareness about financial scams.Some top tips to spot scams include being aware when pressured to transfer money quickly and paying in an unusual way, like using an iTunes voucher or a transfer service. The charity also warned against giving away personal information, such as passwords, PINs, or verification codes.
“Be wary if it seems too good to be true – for example, a pension that yields much more than you’d expect,” the advice said.
Earlier this month, new protections for victims of authorised push payment (APP) scams came into force. Under new regulations, the vast majority of consumers can expect to be reimbursed within five business days of making their claim.
APP fraud happens when someone is tricked into making large bank transfers to an account posing as a legitimate payee. Last year saw a surge in the number of APP scam complaints, with APP fraud accounting for £459.7 million in losses.
The first quarter of this financial year marked a jump in fraud and scams to more than 8,700 cases, over half of which related to online bank transfers in APP scams.
The Financial Ombudsman Service has also reported a rise in complaints, where people spotted investment opportunities on social media and paid fraudsters using debit or credit cards.
Citizens Advice urged consumers who have been impacted by a financial scam to report it to their bank or card company immediately, along with Action Fraud.
