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Written by: Tommy Burns
27/05/2021
You would like to think that in this time of heightened community spirit scams would not be something that we would need to worry about.

However, the opposite is sadly true, with recent research by Phoenix Group revealing that the number of scams reported has increased rapidly in the past year, particularly online scams and amongst the younger generation.

With the rapid evolution of new technologies and online platforms, we are unfortunately seeing many new scamming techniques come to the fore. Fraudsters are capitalising on the ease of accessibility and targeting a new generation of victims.

In particular, scammers are increasingly targeting younger victims through online and social media adverts. In the past year alone, almost three in ten (29%) 18 to 34-year-olds have fallen victim to a scam or fraudulent activity causing them to lose money or have their personal details compromised.

A growing number of young people are seeking financial guidance online at the moment – 49% of 18 to 34-year-olds looked online or on social media for financial information during the pandemic, using search engines and channels such as Facebook, YouTube and TikTok.

While these channels are highly informative and can provide a plethora of instant information, those looking for advice online should also be aware of the risks and traps too, especially as scammers are capitalising on new ways to target victims.

Although it’s positive that the government is taking online protection more seriously, there is still a considerable amount that needs to be done to force search engines and social media companies to be more accountable for fraudulent content on their platforms in future. As scams were not included in the draft Online Safety Bill that was announced in the Queen’s Speech, let’s hope it’ll be reconsidered as it undergoes further consultation before being formally introduced.

Fraudsters are out to take advantage of your personal details in any way they can, so always be on the lookout for anything that does not feel right. With that in mind, key tips on how to spot an online or social media scam include:

Check a website’s security measures

When you visit a website online, always look for the closed padlock symbol and https:// in the address bar of your browser. The letter ‘s’ stands for secure and means your data is encrypted.  Genuine websites will have a certificate from a trusted certification authority demonstrating that they are safe and secure for users, and this certificate forms part of the https process. You can view this certificate information by clicking on the padlock in the address bar.

Don’t allow yourself to be pressured into making a decision quickly 

Pressure to make quick decisions may well increase the chance of making a poor choice and is also an indicator of suspicious activity. It is ok to take a break and think things through if you are not sure. No reputable organisation will mind you taking your time or making additional checks that everything is above board.

Think about the contact you have received 

Take time to review the information you are presented with – is this how the company usually contacts you?  Would your normal provider really text you about a financial opportunity? Think about whether it is sensible for the company to make contact in that way.

Bad spelling and grammar can be a give-away too . Genuine organisations will rarely make these mistakes in their contact to you because they are put together by professionals and checked thoroughly before they are advertised.

If it sounds too good to be true, it probably is

Sometimes an offer may be articulated in a way that will not arouse suspicion, but what it promises does. Offers of unrealistically high financial returns or free pension reviews should immediately raise the alarm, and if you’re lured by these sorts of deals then you should check the credibility before acting further.

Scamming techniques will continue to adapt and develop, so it’s important to remain aware of the latest tactics, and feel empowered to act if something doesn’t feel right. Among those who received suspicious financial advice and lost money as a result in the last year, the average amount each lost was almost £2,000, so it’s well worth being cautious and doing some digging if you do have any suspicions.

This research comes as Phoenix Group has written to the UK government asking it to take urgent action to protect those saving for retirement from fraud. As the issue of online scams was not included in the draft Online Safety Bill, we would urge the government to reconsider including scams as part of it. This would help to ensure that fraudsters are no longer able to pay to advertise pension and financial scams with impunity and that people saving for their pension can be safe online.

Tommy Burns is risk and financial crime manager at Phoenix Group

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