By Tim Collyer, Chartered Financial Planner at Montgomery Charles
Scamming is nothing new. For years, scammers have preyed on people’s greed, sending out fake messages about winning the lottery or offering free vouchers for well-known stores.
Today, scammers are more sophisticated and their tactics more subtle. They no longer rely solely on big promises of wealth or free goods. Instead, they have adapted to target our daily lives, focusing on everyday payments and routine activities. This makes their scams harder to spot and, unfortunately, much more effective.
The evolution of scams: small changes, big impact
The ‘greed-led’ examples described above have moved on: now, scammers focus more on exploiting our routines and catching us off guard. For example, you might receive a message saying your computer’s antivirus software needs renewing or a service contract requires payment. These scams look and feel real because they mimic services that people genuinely use and pay for.
In addition, scams are constantly evolving. Scammers learn from each attempt and make small changes to improve their success rate. The basic pattern remains the same: send out a high volume of messages and rely on a small number of replies to make a profit.
Emails are a favourite medium for scammers because they can send out thousands of messages at once. The next step is to catch you off guard and provoke an emotional response, like annoyance or fear. For instance, you might receive an email saying a payment has been made from your account for something you never bought, like antivirus software or an admin fee for redirecting a parcel.
These emails are designed to make you react without thinking. If you follow the instructions and download software or click on a link, you could be installing malware on your computer. This software can then track your keystrokes, allowing scammers to capture your passwords and gain access to your online banking. In some cases, the software can even manipulate what you see on your screen, changing your bank account balance to make it look like a refund has been made when it hasn’t. This can lead to further scams, where you are convinced to send money back to ‘correct’ a mistake.
How can I avoid scams?
The world of financial management can seem baffling complex, even without considering the fast-evolving world of scams and unscrupulous behaviour.
For those determined to manage their own affairs, we have compiled a useful list of things to watch out for and avoid (see below). For our own clients, we consider our dedication to cyber-security – a process of continuous new learning and enforcement – to be a key part of our service.
The bottom line: we look after your money as carefully as we look after our own. This means:
- Keeping clients informed about common scams like phishing and investment fraud through regular updates, and ensuring they can verify genuine communications from us
- Maintaining robust identity verification protocols, including multi-factor authentication and encrypted communication, to provide an additional layer of protection against fraud
- Implementing strong cybersecurity practices to ensure our IT systems are secure, regularly updated, and protected by firewalls. Our staff receive continuous training to detect phishing and suspicious activity
- Monitoring unusual transactions and verify client requests for significant changes to prevent fraud. When we suspect a scam, we collaborate with regulators and banks, following best practices set by the Financial Conduct Authority (FCA)
Going even further: The staff-to-client ratio
Montgomery Charles has one of, if not the best, staff-to-client ratios in the business. That’s not an accident – we consider this to be a vital component in delivering an industry-leading service – and it’s something we take strong pride in.
This ratio allows our advisers to provide personalised attention, helping them build strong relationships with clients, which in turn helps them understand their clients’ financial behaviour and to spot unusual transactions that could indicate a scam.
Clients are more likely to reach out for advice when they trust their adviser, which reduces the risk of falling victim to fraud. Our client satisfaction survey, which operates on a rolling basis to ensure a consistent stream of feedback on the service we offer, records an adviser trust/satisfaction score of 98.8%*.
Want to know more?
Peace of mind is just one part of good financial planning, but depending on the individual, it can be the most important. If you think you’d like to know more, a complimentary 30-minute consultation is your opportunity to ask us questions and find out whether you might be at risk, in addition to better understanding the transformational benefits that good financial planning can deliver.
How to spot a scam: key red flags
- Be wary of unexpected emails, especially those asking for money or personal information. Take your time to think before reacting. The clues are often there if you look closely.
- Check the email address, not just the display name. Scammers can create email ‘aliases’ to make their messages look more legitimate. For example, an email might appear to be from [email protected], but the actual email address could be [email protected]. These aliases can be created easily through popular email services.
- Do a ‘reverse lookup’ before calling any number provided in a suspicious message, do a reverse lookup simply by entering the number into Google or another search engine. Many scam numbers are listed online, and a quick search can save you from an expensive mistake.
- Beware of urgency: Scammers often create a sense of urgency to make you act quickly without thinking. They might say you need to respond immediately to avoid a fine, claim a refund, or stop the police from coming to arrest you. Remember, legitimate organisations will not pressure you in this way.
- Scammer sometimes talk down your support network in an attempt to separate you from people you trust. They don’t want anyone who might stop the scan taking an interest.
- Trust your instincts, because if something feels off, it probably is. Trust your intuition and ask a friend or family member to take a look. Remember, some people are more susceptible to scams than others. If you know someone who has a keen eye for spotting scams, don’t hesitate to ask for their help.
Protecting yourself and others
Scams are becoming more sophisticated, but there are steps you can take to protect yourself
- Be aware: Stay informed about the latest scams and share this knowledge with your friends and family, especially those who may be more vulnerable, like the elderly or those less familiar with technology.
- Use security software: Make sure your computer and devices have up-to-date security software. This can help protect you from malware and phishing attacks.
- Monitor your accounts: Regularly check your bank and credit card statements for any unusual activity. If you spot anything suspicious, contact your bank immediately.
- Be cautious with personal information: Be careful about sharing personal information, especially over the phone or online. Scammers often use personal details to build trust and make their scams more convincing.
What to do if you’ve been scammed
If you think you’ve fallen victim to a scam, don’t panic. Here are some steps you can take:
- Contact your financial adviser, if you have one. They will know exactly how to shut down the risk and ensure your assets remain protected. A good adviser will also help set up new structures and accounts as required.
- If you’ve given out your bank details or made a payment, contact your bank immediately to stop any further transactions.
- Report the incident to Action Fraud, the UK’s national reporting centre for fraud and cybercrime. This helps authorities track scams and warn others.
- If you’ve shared any personal information, change your passwords immediately to secure your accounts.
- Scammers may target you again after a successful scam, so be on high alert for any further suspicious activity.
Any money invested carries an element of risk and you are not guaranteed to get back the money you invested. This article does not constitute advice and you should consult your financial adviser prior to any action.
*Figures correct as of September 2024
