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How to Recognize Scams

What is a scam? In simple terms scams are dishonest or fraudulent schemes. Get the latest information on scam and fraud rackets in this guide about scamming and scammers.

SCAMS AND FRAUDS: Each year online scams and scammers get more sophisticated in the way they con people.

It is often difficult to spot a scam. But it is easier to recognise scams when you know what tricks to look out for.

Scamming criminals use lies to swindle and deceive you. They usually fool you with dishonest behaviour into parting with cash.

In the worst cases you could lose a large amount of money. All too often scams result with nothing in return, or something of little value.

Not all scams happen through the Internet. But you should report any suspicious Internet activity to the appropriate authorities. Let’s identify some common signs of scams and frauds that should set off a few alarm bells if you spot them.

Recognising Scams and Frauds

This list identifies some situational similarities in almost all scams and frauds. Be particularly wary if:

  • Something seems too good to be true – because it usually is!
  • You get an unexpected contact by someone or a company you are unfamiliar with. That includes contact by phone or text message, by email, or by a knock on your door.
  • Anyone asks for your personal details or bank account information.
  • You feel pressured into making a snap decision or no time to fully consider the implications.
  • Anyone asks you to pay money up-front. Be especially wary if their contact details go to a PO Box address or they give you a mobile phone number.

Note: Always apply the S.C.A.M test shown in the image because if you can spot a scam you can stop a scam!

How to Recognize Scams and ScammersList of Common Scams

There are many different types of cons because the complexity changes often. Almost all would get viewed by the scammers as easy cons to make money.

That is especially true for online scams facilitated by cyber technology. This list of common cons has a few world famous frauds included as well.

Face-to-face Fraud Schemes

Not all door-to-door sales people are dishonest or fraudulent. In fact the vast majority are legitimate and ethical.

But the dangers of most face-to-face fraud schemes are not easy to recognise. You need to be familiar with the intentions of bogus tradespeople.

They pressure into buying something that you do not need or want. There are few cases where purchases have been worth the money handed over.

Here is a list of typical face-to-face schemes used by charlatans and bogus tradespeople:

  • Fake or hoax collections for charity
  • People checking out your household valuables but they are in fact thieves
  • Tradesmen overcharging for shoddy workmanship of home improvements or maintenance work
  • Sham salespeople selling unsuitable or unfair contracts

Boiler Room Investment Scams

Boiler Room Scams, aka Investment Scams, are world famous frauds.

The ‘salesperson’ fraudsters usually contact you unannounced by ‘cold calling’ on the telephone.

They pressurize their victims into buying investments or shares. The shares are bogus and the products sold often relate to:

  • Gold or Antiques
  • Vintage Wine
  • Land or Forestry Investments
  • Carbon Credits
  • Renewable Energy

Boiler room sales people might offer you secret stock tips to add credibility to the deal.

But in fact the tricksters will soon disappear with your money if you fall for the scam.

Pension Scams UK

Almost all pension fraudsters will claim to know a way you can access your pension pot before retirement.

In fact, some people can withdraw pension money early. But, use good judgment if you are 55 or older.

The common signs of a pension scam include claims that you can get:

  • Cash before the age of 55.
  • More cash than your current pension scheme.
  • More than 25% of the pension value ‘released’ early.

Pension defrauders try to charge you a fee to get money from your pension. Even worse, it could also leave you with a large tax bill to pay.

Related News: UK Government adds Emails and Texts to Ban on Pension Scam Cold Calls

Lottery Scams, Prize Draws, and Sweepstakes

Receiving a letter or email informing you that you have won a lottery, prize draw, or sweepstake sounds rewarding. But, the lottery scam often takes one of several different paths from that point on. You will probably get asked to:

  • Send some money as a processing fee or legal charge to claim your prize that, in fact, does not exist.
  • Prove your identity using your passport. Criminals can then use it to steal your identity (identity theft).
  • Provide your bank account details to receive the payment. Your information is then used to withdraw from your account.
  • Call a specific phone number to claim your prize. The call is often a premium rate number and cost you more than the actual value of the prize. You should check the rates for phone call charges in the United Kingdom.

Property Fraud and Defraud (land banking)

Beware of any ‘get rich quick’ opportunities. Becoming involved in a lucrative property scheme could be a scammer’s attempt to defraud you.

The defrauder might offer you a development purchase of a property that is not even built. Be aware that land could be farmland or you may never get planning permission to build on it. You will almost certainly lose your money.

Other unscrupulous fraudsters steal property title deeds and pretend to be the owner. They often try to borrow money using the fake property deeds as collateral.

Vehicle Fraud Schemes

Some scams and frauds are more common than others. Nowadays vehicle fraud schemes are less recurrent. Even so you need to know how to recognise scams relating to buying and selling cars.

Be alert about buying a stolen vehicle or a cloned car. There are ways you can perform a stolen vehicle check online. The fraudsters change the details of the stolen car to match those of a legitimate vehicle.

If you get tricked you could end up paying for a car that never gets delivered to you. Always contact your local police station if you have concerns about vehicle fraud.

Scams and Frauds: How to Recognise a Scammer Online