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Banking, payment card, investment and pension fraud

Banking and payment card scams

Banking and payment card scams involve the fraudulent use of a victim’s card details to withdraw cash or buy goods. With cases of card fraud on the increase, it’s more important than ever to protect your card details when you’re out and about and when you're shopping online.

Phone scams

Your bank and the police will never ring and ask you to verify your PIN, withdraw cash or purchase high-value goods. They’ll also never come to your home to collect your card, cash or purchased items. If you get a call like this, end the call. If you get a call from your bank or the police, make sure you know who the person is before handing over any personal details. You can do this by calling your bank (the number on the back of your card) or the police (101) on a different phone line. To get a different line, use a phone owned by a family member, friend or neighbour. This is because scammers can keep phone lines open after pretending to hang up. So while you think you’re making a new phone call, the line is still open to the scammer, who pretends to be someone from your bank or the police (also see Courier fraud). Depending on your bank, the security questions they ask may be different, but they’ll never ask you to authorise anything by entering your PIN into your phone. Never send money abroad to a person you've never met or to anyone you don’t actually know and trust. Likewise, never agree to keep your online relationship a secret. This is a ploy to get you not to tell your family and friends, who’ll see the scam for exactly what it is. Equally, don’t accept any offer of money. A scammer may ask you to accept money from them into your own bank account, using a convincing story as to why they can’t use their own account. The circumstances may seem genuine, but you may unwittingly be committing the criminal offence of money laundering.

ATM or cash machine scams

Never share your debit or credit card PIN with anyone. If you see anything unusual about the cash machine or it’s been tampered with, don’t use it and report it to the bank as soon as possible. When using the ATM:

  • cover your PIN as you type it

  • stand close to the machine

  • use your free hand and body to shield the keypad as you enter your PIN

This will prevent any prying eyes or hidden cameras seeing your PIN. Don’t get distracted. Be particularly cautious if seemingly well-meaning strangers talk to you or offer to help while you’re using the ATM.

If they’re persistent, simply cancel the transaction and discreetly put your card away. Fraudsters sometimes fit devices to cash machines that trap your card, or ‘eat’ it, which they then retrieve as soon as you’ve left the area. If an ATM eats your card for any reason, report it to your card company straight away, ideally using your mobile while you’re still in front of the machine.

Make sure you store your card company’s 24-hour contact number in your phone. Once you’ve completed a transaction put your money and card away before leaving the cash machine. Destroy or ideally shred your cash-machine receipts, mini-statements or balance enquiries when you’ve finished with them.

Banking scams

Check your statements or your online account regularly, even the small things you buy. Tell your card company straight away if you suspect a fraud. Dispose of statements or slips that contain your card details carefully and securely by shredding or tearing them up. This includes your cash machine receipts, mini statements or balance enquiries. If you need to destroy your bank card, make sure you cut through it, including the metal chip. You can also use a shredder to destroy it.

Investment scams and pension fraud

The world of investments is extremely vulnerable to fraud. Since many emerging markets are unregulated, it’s difficult for authorities to enforce good, ethical working practices. Common investment scams involve buying:

  • rare metals

  • diamonds or gemstones

  • rare wine

  • land

  • carbon credits and alternative energy technology

If you’re new to investing, find out more about investment scams below.

Common investment scams

In the most common scams, fraudsters cold-call their victims by phone and pretend to be from an investment company. They try to sell investments in emerging markets they claim will lead to financial gains higher than the rates of established investments like ISAs. In reality, the item offered may not exist or is worthless.

Often the scammers give details you might think only a genuine investment company will have. They may have details of investments you’ve made, shares you hold and know your personal circumstances.

Remember, the scammers do their homework and make it their business to know as much about you as possible. They’ll often call you a few times to form a friendly relationship. If you respond in any way, they’ll keep going, trying to build trust and persuade you to part with your money. If they get money from you, they’ll probably call again to persuade you to ‘invest’ more money, perhaps in a different commodity.

Scammers may say they’re from a reputable investment company; some say they’re stockbrokers or consultants. Always seek independent financial advice before you invest in anything and check with the Financial Conduct Authority (FCA) to see if the company is registered. Don’t just rely on Companies House data. Be wary of companies claiming they can recover money from lost investments on your behalf for a ‘one-off’ fee. This could be the same fraudsters trying to scam you again. As before, they’re likely to know all about your previous investment history.

Pension fraud

If you’re over 55, the law now lets you access your pension savings. You have control of your pension pot and it’s for you to decide how to invest the money. Scammers may target you to steal your savings. They do this by persuading you to cash out your pension and put the money into fraudulent and unregulated investments with the promise of high returns. If you’re under 55, you can transfer your pension to another scheme, but you can’t access the funds unless you’re seriously ill. If you’re offered a cash incentive to transfer your pension, you’re likely to face tax charges worth more than half your

Pension Savings

If you’re cold-called, get a text, email or similar approach that you haven’t invited, offering a pension review, be careful. It may not be someone acting in your best interests.

Never make a decision based on phone calls, glossy brochures or pushy salespeople. How often do you buy from a doorstep salesperson? So why trust someone you’ve never met, contacting you from a company you’ve never heard of, with your life savings?

Always seek advice from an expert who has no connection with the ‘sales pitch’. If possible, research the company. A genuine financial adviser should be registered with the FCA.

In short, if you receive a cold call, email, text, or any message about your pension, end the call or delete the message immediately. For more advice, visit The Pensions Regulator.

For more information and help or to report these and many other types of fraud, go to Action Fraud, the UK’s national fraud and cybercrime reporting centre.

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