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Knowledge Base » Safeguarding » What is a Scam?

What is a Scam?

Last updated on 3rd May 2023

Criminals are turning to more sophisticated ways to take your money, whether you are an individual, an organisation or a business. More than £1.3bn was stolen by con artists in scams last year in the UK, figures reveal. Scams are a form of fraud, and the National Crime Agency (NCA) states that fraud is the most commonly experienced crime in the UK.

The 2019 Financial Cost of Fraud report estimates the cost of fraud to the UK is between £130bn and £190bn a year. The Office for National Statistics (ONS) says that people are more likely to fall victim to fraud or cyber offences above any other crime.

Between April 2018 and March 2019:

  • 741,123 crimes were reported to Action Fraud.
  • £2.2bn was lost by victims.
  • 65% of reports were from businesses and 35% from individuals.

It has been reported that millions more people have been targeted by scammers as the cost-of-living crisis takes hold, new research by Citizens Advice has found. More than three quarters of UK adults said they have been targeted by a scammer this year; this is a 14% increase compared to this time last year. A total of 1,616 out of 2,088 respondents (77%) said they had been contacted by someone that they think was trying to scam them; this included 5% who said that they had been scammed.

The most common types of scams reported included:

  • Deliveries, postal or courier services (55%).
  • Someone pretending to be from the government or HMRC (41%).
  • Someone offering a fake investment or financial ‘get rich quick’ scheme (29%).
  • Rebates and refunds (28%).
  • Banking (27%).
  • Online shopping (24%).
  • Health or medical (13%).
  • Energy scams (12%).
Courier services are a common scam

What is a scam?

A scam is a dishonest or fraudulent action or scheme that attempts to take money or something of value from people. It is a confidence trick that dishonest groups, individuals or companies perform. The person who carries out a scam is a scammer, trickster, swindler, con artist or fraudster.

What are the different types of scams?

There are many different types of scams that people should be on the lookout for; a comprehensive A–Z list is published on the Action Fraud website.

Some of the most prevalent are:

Phishing

This is an email or text scam where you appear to get a message from a legitimate source, such as your bank, HMRC, PayPal, BT or Amazon. The message will encourage you to click on a link and log into your account, normally by telling you your account has been locked or there is a large transfer of money.

Some of the latest Phishing scams include:

  • New free COVID test scam – This is a version of a previous scam. Individuals are sent text messages claiming they have been in close proximity to someone who has tested positive for the Omicron BA-5 variant and that they are eligible for a free test. Do not click the link. People have been duped into giving personal information, with some divulging bank details as they are asked to pay for postage and packaging.
  • There’s a new council tax refund scam doing the rounds relating to the energy rebate of £150 – never respond to a text or email about the rebate. The Local Government Association has given guidance that people who pay for council tax by direct debit will receive the government’s energy rebate directly into their bank account. If people pay in other ways (not direct debit) they will be sent a letter with details of how to claim the rebate.
  • People have been receiving an email from the energy company E.ON, allegedly offering a refund. It is a convincing email but it is fake. If unsure never click on any link but go to the website via your own search.
  • According to Which? there have been a growing number of gift card scams relating to big high street stores and the latest one is supposedly from Primark. Phishing emails are promising Primark Rewards, claiming that you need to activate the delivery in order to receive them. Never click on a link that you don’t completely trust.
  • Email scam – This is a group email sent to you and your contacts. It will say something along the lines of “Where are you presently? I need your help for something very urgent so please get back to me via email as soon as you get this message.” DO NOT REPLY TO THIS EMAIL. It is a scam, a request for money for someone getting through the coronavirus.
  • Action Fraud has received over 100 reports in one week about fake emails purporting to be from TalkTalk. The emails state that the recipient’s TalkTalk account is in credit and that they are owed a refund. The links in the emails lead to malicious websites.

Vishing

This is a phone call where the scammers pretend to be from your bank, building society or even a government agency. During the phone call, the fraudsters will attempt to get you to reveal your personal details. If you receive a call you are suspicious about, dial 1471 to obtain the number that called you and you can then use a number tracing website such as whocalledme to check out the number.

 Some of the latest Vishing scams include:

  • You receive a phone call, and the scammers say they are from a familiar price comparison website that you might have used in the past. You are then offered a special offer, one day only, often only available for a limited number of customers so you must do it now. They will pressurise you to make a quick decision and won’t give you time to think. There are a number of signs this is a scam. Firstly, it is unlikely for a price comparison website to call. Secondly, it is unlikely that there will be offers just available for the first few people who sign up, they do offers for everyone and not for the few. Never give any of your details over the phone to the caller.
  • Medical alert systems scams – People are phoned up and told that they might be entitled to a free medical alert button from Medical Alert Systems. The caller knows the name of the person and says that the offer is for vulnerable adults who are at risk of falls. This is a potential scam. Never give out personal details whether on the phone or by email or text.
  • A message is sent to mobiles, often via WhatsApp, by someone pretending to be their son or daughter and claiming they have lost their phone. Once the new number is saved, scammers then say they need money after an incident, hoping that the victim will trustingly hand over thousands of pounds and their financial details.
  • Loft insulation scam – Age UK has been made aware of a scam phone call that was made to a member of the public by a company who call themselves ‘Vision Homes’, purporting to work for Age UK and offering loft insulation. Age UK says, “please encourage any victims of this to report scams to their local trading standards and the local police”.
  • Watch out for fake calls (from a withheld number) by someone who says they are a police officer, giving a name, police station and police ID, and claiming that you have been a victim of serious fraud on your bank account. These callers have no connection with the police. The police or your bank will never contact you out of the blue to ask for your PIN, password, or to transfer money to another account to keep it safe.

Charity scams

Criminals set up fake organisations or websites to take advantage of people’s generosity. Scammers use a variety of methods to con donors, including selling fake charity T-shirts, sponsorships etc. Charity scams typically appear after a disaster or tragedy.

One of the latest Charity scams includes:

  • Action Fraud has received 196 reports of bogus requests to fundraise for victims of the Ukraine crisis. Be cautious when donating to an online fundraising page, as fake ones are often badly written or contain spelling mistakes. To donate online, type in the address of the registered charity website rather than clicking on a link.

Romance fraud

Banks say scammers who hide behind fake online dating profiles stole £30.9m in 2021, up 73% since 2020, yet figures from Action Fraud suggest victims lost a gut-wrenching £95.1m. Females (48%) are more likely to report dating scams to Action Fraud than males (41%). They reported losses of £63.2m in the past 13 months to May 2022, more than double that of males at £31.6m. Most reports by men were from the 20-29 age group, while women aged 50-59 were more likely to report dating scams.

Pension scams

These can be hard to spot. Scammers can be articulate and financially knowledgeable, with credible-looking websites, testimonials and materials that are hard to distinguish from the real thing. Scammers usually contact people out of the blue via phone, email or text, or even advertise online, or they may be introduced to you by a friend or family member who is also unknowingly being scammed.

Scammers will make false claims to gain your trust. For example, by claiming they are authorised by the FCA or that they don’t have to be FCA authorised because they aren’t providing the advice themselves. You can check them out on the FCA website.

Online shopping scam

Online shopping scams

Shopping and auction fraud involves fraudulent shopping scams that rely on the anonymity of the internet. Fraudsters often use stock images or other people’s images, or use the same image on multiple websites/adverts to advertise goods or services that often sound too good to miss out on, might not really exist, be fake or of inferior quality. Make sure that the website you are buying from is genuine, and not a fake or copycat site, by typing in the address yourself and checking the spelling.

Fake addresses usually vary from authentic ones with just one or two incorrect letters. Research sellers’ and other bidders’ selling history, and bear in mind that a website ending in .co.uk doesn’t necessarily mean the seller is based in the UK. Check the address of the company and the phone number. The most common scams occur on online auction sites, where criminals pose as sellers of popular items, such as mobile phones, cars and designer goods at bargain prices.

Their aim is to encourage you to transfer money quickly. After the payment is made, they disappear, leaving you with no goods, or faulty or counterfeit goods and no way of getting your money back.

Investment scams

These were the second largest category of APP fraud losses, with £171.7m stolen in total, a 57% jump. Authorised push payment fraud, also known as APP fraud, happens when scammers deceive consumers or individuals at a business to send them a payment under false pretences to a bank account controlled by the scammer.

Authorised push payment fraud has been made more attractive to criminals since the advent of real-time payment schemes, such as Faster Payments in the UK, as scammers can quickly take the money and run. This type of fraud is on the rise.

How can you recognise a scam?

Scams can be difficult to recognise, but there are things you can look out for:

  • There is an old saying, “if it seems too good to be true, it probably is”. Beware of too good to be true offers, as most will probably be a scam.
  • If you have been asked to give away personal information like passwords or PINs, reputable organisations will never ask you for these.
  • Be wary of unusual payment requests. Scammers will often ask you to use an unusual payment method, including preloaded debit cards, gift cards, iTunes cards or virtual currency such as Bitcoin.
  • Scammers can easily fake an official-looking email, using the same logo and design as the real company. Often your guard is down when you receive an email from a company you have dealt with before, but there are some tell-tale signs to look out for such as a generic rather than a personal greeting, poorer quality presentation, poorer quality grammar and spelling, and overly official or forced language.
  • If someone telephones purporting to be from an organisation you are not expecting a call from, say that you will call them back. Don’t use any number that they give you, look up the number yourself to call back. Most authentic organisations do not telephone unexpectedly.
  • If you have been a victim of a scam, some really unscrupulous scammers use follow-up scams to try to take advantage when you are feeling vulnerable and will try to extract more money from you. A common ply is to pretend to be an official agency appointed to investigate your scam and retrieve your money for a fee. Official agencies do not charge for their services.

How to protect yourself against a scam?

Scammers target people of all backgrounds, ages and income levels. There is no one group of people who are more likely to become a victim of a scam – all of us may be vulnerable to a scam at some time. Scams succeed because they look like the real thing and catch you off guard when you are not expecting it.

Be alert to the fact that scams exist. When dealing with uninvited contacts from people or businesses, whether it’s over the phone, by mail, email, in person or on a social networking site, always consider the possibility that the approach may be a scam. Remember, if it looks too good to be true, it probably is.

Be aware of spoofed websites. These are fake sites made to look like real ones to steal your personal or banking details when you submit them to the site. Check the website address at the top of the web address bar to make sure no characters are incorrect. Look for ‘https’ at the beginning of the web address and the padlock symbol.

Do not open suspicious texts, pop-up windows or click on links or attachments in emails – delete them. If you are unsure, verify the identity of the contact through an independent source such as a phone book or online search. Don’t use the contact details provided in the message sent to you.

Don’t respond to phone calls about your computer asking for remote access – hang up immediately even if they mention a well-known company such as BT, TalkTalk etc. Scammers will often ask you to turn on your computer to fix a problem or install a free upgrade, which is actually a virus which will give them your passwords and personal details. Ring your internet provider yourself using a number that you have looked up yourself to check if it is them calling you.

Keep your personal details secure. Always shred your bills and other important documents before throwing them out. Keep your passwords and pin numbers in a safe place. Be very careful about how much personal information you share on social media sites. Scammers can use your information and pictures to create a fake identity or to target you with a scam.

Keep your mobile devices and computers secure. Always use password protection, don’t share access with others, including remotely, update security software and back up content. Protect your WiFi network with a password and avoid using public computers or WiFi hotspots to access online banking or provide personal information.

Be careful when shopping online. Always use an online shopping service that you know and trust. Think twice before using virtual currencies like Bitcoin as they do not have the same protections as other transaction methods, which means you can’t get your money back once you send it. Many credit cards offer consumer protection so, if possible, pay by credit card rather than a debit card.

What should you do if you have been a victim of a scam?

Scams are becoming more sophisticated and many people fall victim to them. If you have fallen victim to a scam, make sure you report it. Scams are crimes and should be reported to Action Fraud, the national fraud and cybercrime reporting centre. You can telephone them on 0300 123 2040. You can also report phishing scams or computer viruses that you have received but haven’t fallen victim to.

Many organisations have their own email address to report phishing scams purporting to come from their organisation.

Certain scams can also be reported to Trading Standards using the Citizens Advice consumer helpline 0808 223 1133. Trading Standards looks at cases where companies have acted illegally or unfairly, for example, if they have pressured you into buying something that you didn’t want or they haven’t carried out work on your home properly.

You can also contact Victim Support on 0808 168 9111 or you can call Samaritans for confidential emotional support on 116 123.

Reporting incident to trading standards

Is it illegal to scam someone?

There are various different types of fraud set out in the Fraud Act 2006. Scamming in all its guises is illegal under this legislation. Online scamming often falls under the category of fraud by false representation pursuant to Section 2 of the Fraud Act 2006.

Fraud by false representation is committed when a person dishonestly makes a false representation knowing or believing it to be false and misleading with the intention of making a gain for themselves or another, or to cause a loss to another, or to expose another to loss. For example, a phishing scam that intends to obtain someone’s bank account details would be fraud by false representation.

Many scammers could be part of an organised crime network and as such committing other offences too.

The Sentencing Council’s guide on fraud provides more details in respect of the factors that the court will take into consideration when deciding on sentencing scammers.

Final thoughts

While families and businesses have struggled due to the pandemic and are still struggling due to the cost-of-living crisis and the economic situation, the criminal gangs behind economic crimes such as scamming have been quick to capitalise by tailoring scams to fit our changing lifestyles. We all need to focus on stopping this fraud from happening in the first place by being extra vigilant with all of our financial transactions and personal information.

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About the author

Evie Lee

Evie Lee

Evie has worked at CPD Online College since August 2021. She is currently doing an apprenticeship in Level 3 Business Administration. Evie's main roles are to upload blog articles and courses to the website. Outside of work, Evie loves horse riding and spending time with her family.



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