Con artists operate in every walk of life, but could you spot a scam?
Working as a personal finance journalist can make you jaded at a pretty young age as you’re constantly hearing tales of people who have been fleeced or hoodwinked.
However, it’s difficult not to be cynical when you examine the facts. According to figures from the Cabinet Office, 56% of people have been targeted by online criminals – with the average victim losing £247. Scarier still: internet fraud is just one type of scam and there are countless other ways you could be caught out.
If you’ve been contacted about a deal that seems too good to be true, chances are you should trust your instincts. Here are six telltale signs that you’re dealing with a scammer.
1. You receive a cold call
If you’re contacted out of the blue by a company that claims its services could make you filthy rich, it’s wise to be on the alert. If an opportunity were really that good, seasoned investors would be queuing up to get in on the deal – the company won’t need to make unsolicited calls.
2. You’re asked to pay fees upfront
This type of fraud is known as an ‘advanced fees scam’ and should be treated with extreme caution. If you’re informed that you have won a prize but can only claim after paying a fee, it’s prudent to be on your guard.
Be especially vigilant if you’ve never heard of the company before and have no recollection of entering the competition. Have you ever heard of someone who has legitimately bagged a fortune in a situation like this? Thought not!
Also watch out for anybody who asks you to provide your banking details over the phone or via email.
3. No permanent office
Companies without a permanent address are inevitably more difficult to trace if something goes awry.
If a company provides you with a mobile phone number or PO Box, the Citizens Advice Bureau advises you to check its details with Companies House or do some additional research to ensure it’s a legitimate business.
Likewise, you should also be wary of any company based overseas as these can be more difficult to trace.
4. The company isn’t regulated
Before entering into a contract with any business, it’s wise to check it is registered with the relevant bodies. For instance, reputable financial companies should be listed on the Financial Services Authority (FSA) register.
If you’re especially concerned about a particular business, you could check this list of unauthorisesd firms that the FSA warns customers against.
5. Poor spelling and grammar
Not to be pedantic but errors on a website, in emails or letters are often a warning sign that something is amiss.
Legitimate companies should take care to appear professional and hire someone with a decent standard of English to produce their written content.
Although this isn’t always the case, it’s a pretty reliable yardstick as far as scams are concerned.
6. Ssshhh! It’s a secret
Scammers may claim to be privy to inside knowledge in order to tempt you to invest in a product that turns out to be fraudulent ­­– either non-existent or worthless.
The scammer may also ask you to keep the investment a secret. Would a properly regulated broker or investment firm really behave in such an unprofessional manner?
The real reason fraudsters ask you to keep the call a secret could be that they’re worried that you’ll discuss the matter with someone who will clue you into the fact it’s a scam.
For more articles like this, check out Five of the craftiest holiday cons and Four shocking insurance scams.
**This material is for information purposes only and should not be considered financial advice. We strongly encourage our readers not to rely solely on this content, but to seek independent advice when making financial decisions.**
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