There are innumerable financial scams – largely because of the attraction of large sums of money to the victims and for the fraudsters there’s the reality of taking money from people for nothing, largely by using their own greed against them.

Online fraud is a huge industry with countless victims and it’s getting worse.

UK statistics show:-

Financial fraud losses across payment cards, remote banking and cheques totalled £755 million in 2015, an increase of 26 per cent compared to 2014.

Card Fraud is split up as follows:-

·         70% is remote purchases – i.e. where stolen card details are used

·         13% is lost and stolen cards

·         2% is card not received i.e. the card is stolen in transit

·         8% is counterfeit cards

·         7% is card ID theft – the fraudster uses the person’s identity information to get their card details

We all need to be more aware then ever of these scams and how to avoid them.

The five most common online financial frauds in the UK are:-

 1. Cold Callers

The victims may receive telephone calls offering them an investment opportunity with very high returns (20% or 40% or more.). The scammer warns that the offer is only open while on the call so the victim has to make a fast choice or lost the opportunity.  There may be a complicated story to explain why the offer is possible and cannot last.  The scammer will want payment by bank transfer or via a money transfer business such as Western Union. The bank account would be emptied once the payment is received ad payment via money transfer cannot be tracked or reversed.

2. Phishing

These are scams where the scammer pretends to be working for a trusted organisation such as a bank or electric company, local government, BT, Microsoft, and Google etc. Their aim is to get your details so they can access your online accounts, empty your bank account or use identity theft to pretend to be you and take out loans etc.

3. Pensions

Since the government changed the law so that people could take out some or all of their pension pot before retirement, people over 55 have been bombarded by cold callers offering “wonderful” schemes that supposedly give the victim access to their funds and still protect their pension.

Some of these schemes are genuine but carry such heavy charges that they are a very bad deal for the victim and many are just fake – they are simply a way for scammers to get your money.

4. Homebuying Fraud

Buying a home is the largest money transaction most people ever make and this is why scammers love it.

If they can get into your emails or those of your solicitor then they monitor what’s going on and wait for the opportunity to create their own email claiming to be from the solicitors telling you which account to pay into.

It’s their account of course and the money will quickly transferred out and gone. This scam intercepts cash transferred as a home deposit to a solicitor in the lead up to exchange and completion.

5. Free Offers

There are numerous free offers, free trials etc. available for all sorts of products from cosmetics to foods.

To get the free items, you hand over your credit card details or bank details and you may get something free. But the scammers create a direct debit or recurring payment and you may not notice for a some time the money being drained from your account. Once you notice it’s difficult to get through to the company and get the payments stopped.

These are personal frauds but there are the very large scale frauds that happen such as these two examples.:-

The Traffic Monsoon Ponzi Scheme

Pyramid investment scheme worth £160 million was shut down after taking money from 162,000 people

Traffic Monsoon, run by Charles Scoville, claimed to make people money through online advertising ‘AdPacks’ but   Scoville, an American “entrepreneur” has a history of similar schemes that collapse.

OneCoin Cyber Currency

Emails about OneCoin claim this is the new cyber currency that has made more than 300 millionaires already. It is a claim of money from nowhere and the authorities in multiple countries are investigating the company.

OneCoin says it is a digital currency similar to bitcoin but with key differences such as it uses a centralized hub for exchange, storage and transaction logging. This difference has led some to claim that OneCoin isn’t a cyber currency at all.

It’s just a scam.


Be wary.

Articles on Guidance