Q: What’s worse than having your life savings stolen from you? A: People finding out you’ve been defrauded.
It’s hard to believe, but for many people it seems that the shame of being defrauded is harder to admit to than dealing with being tricked in the first place.
According to a report by the Financial Conduct Authority, over a third of over-55s – the people most likely to be targeted by fraudsters – said they would not admit to being scammed.
More worryingly, over a fifth of those who had been the victim of scammers said that they had not reported it.
What’s most surprising is we’re not talking small sums of money here.
Over the past few years I’ve spoken to people who’ve been conned in to handing over their life savings.
The ‘vishing’ or ‘courier fraud’ scams have seen vulnerable people tricked in to transferring or handing over sums averaging around £25,000-plus.
I spoke to one woman who had transferred over £100,000. Sadly, the money was not recovered.
Boiler room (investment) scams can net even higher sums, while fraudsters who have targeted people selling their houses by pretending to be lawyers can walk away with the entire profits of the sale.
Even small businesses are not immune. I spoke to one company that had lost £300,000 in a similar scam.
Usually I take a light-hearted look at money matters or consumer rights in this column. But when it comes to scams, it’s no joke.
And the best way we can avoid them is to learn how they work – and speak to older or vulnerable people who are most likely to be targeted.
Here are the two main money scams doing the rounds.
Vishing/smishing/courier fraud: Ignore the names, this is a typical confidence trick re-booted for the modern age.
The fraudster calls, texts or emails pretending to be from a bank or an authorative organisation.
They tell you your account has been compromised and you need to transfer the money out urgently.
They may tell you to call the number on your card, make an online transfer, hand the card to a courier or even go in to the bank.
The techniques vary but at heart, just remember this one thing. Your bank will never ask you to transfer money out of your account. Ever.
Nor will it ask for your passwords. Be suspicious.
Boiler room fraud: Named after their aggressive ‘sales’ techniques and environment, these fake businesses browbeat you on the phone in to investing in ‘sure things’, like land in developing countries or high-yield foreign shares.
They wear customers down on the phone to get them to sign up. Fraudsters exchange victims’ names with each other too to re-target them.
Four words to remember: hang up the phone. Horribly, fraudsters often go back for a ‘second hit’ as people often hand over more cash if they think it will help them get their original loss back.
And here’s the really important thing to bear in mind. The people who are being scammed aren’t stupid.
I’ve heard tapes of fraudsters in action. Sometimes they’ve targeted people repeatedly over days, pretending to be different people, using incredibly convincing arguments.
Fraud works because good fraudsters are extraordinarily skilled at what they do. And anyone can be a victim.
But we can beat them by talking about these subjects – and not suffering in silence.
I’m adding a detailed guide to the Resolver website about scams. But if you’ve been affected, speak up and don’t be ashamed.
* If you’ve been affected by a scam, get in touch firstname.lastname@example.org. Find out more about your rights and make a complaint at www.resolver.co.uk