As we approach Christmas, many official bodies have warned that scammers are likely to target more people – especially as they do their shopping or authorise larger payments from their bank accounts. Also, the Financial Conduct Authority (FCA), has warned that December is often a time when fraudsters offer “Christmas loans” – where they ask for an up-front fee, but never send the credit/loan. Below, our financial planning team at Vesta Wealth offers some thoughts on how to help protect yourself from financial scams this Christmas.
We hope you find this article helpful. Please contact us if you would like to discuss your situation with your Financial Planner.
Types of scam
MoneyHelper is a government website which covers a range of financial issues. You can read about the many types of financial scams which are prevalent today, including investment scams, pension scams and authorised push payment fraud. Many of these scams exploit our tendency to trust certain sources of information or communications.
Practice online safety
Of course, the websites you visit matter, with fraudsters able to perform online scams before you even arrive at a checkout page. Here, it is vital to follow essential safety steps – especially when submitting banking information:
- Be careful about connecting to public WiFi networks, especially ‘open networks’ such as those often offered in cafes. This allows the hacker to position himself between you and the connection point, which means they could intercept your connection and infect your PC or smartphone. Instead, rely on your mobile data.
- Use a VPN (virtual private network). This software lets you establish a private network – even across a public network. This enables you to send and receive data more securely.
- Make sure you only visit trusted websites. In particular, look out for the ‘https’ prefix in the website’s address (not http). This is often displayed as a ‘green padlock’ in certain web browsers, and indicates a more secure connection.
- Do not click on links in emails, text messages and other apps (e.g. social media) which look suspicious. Be especially wary if you do not know the sender. Sometimes, these links send you to a fraudulent web page which seeks to steal your information.
Take care with payments
The UK’s intelligence and security organisation – GCHQ – has warned that over 4,000 incidents have occurred where businesses have unwittingly leaked their customers’ financial information to hackers. At Christmas, the average person spends £355 on Christmas presents. One way to protect yourself, therefore, could be to put a small amount of money on a dedicated debit card for your Christmas spending – and only use this when shopping online. Alternatively, you could use a third-party app such as Apple Pay or PayPal. These steps can help protect your wider finances if you do, unfortunately, find yourself to be the victim of a scam.
However, you want to minimise this risk as much as possible, regardless! Here, be selective about the websites you use for Christmas shopping. For small businesses, you may even wish to contact the owners about their payment software – asking for assurances that it is up to date before you buy. Make it a habit to check your bank statements regularly in December, to keep an eye out for suspicious activity.
Be mindful of scammer tactics
It is still possible to fall victim to a scammer when following the above suggestions – if you are not aware of common fraudulent tactics and red flags. Here, the FCA has offered some ideas to help consumers protect themselves, which we have summarised here:
- Watch out for anyone offering you a loan at Christmas who also asks for an up-front fee. Banks, for instance, do not do this with credit cards; they take the initial risk themselves that the customer may not pay them back. Fraudsters, typically, do not take this risk.
- Be careful of someone who pressures you to act fast. Often, the “loan” or other financial “opportunity” they offer will be presented as “time limited”, where you need to “act now” to take advantage of it. This is a classic red flag of a scam.
- Scammers often ask people to keep quiet about the loan/opportunity they are offering. For instance, if someone talking to you claims to be from your bank, they might not want you to speak to other people in the bank to confirm what they are saying.
- Sometimes, scammers ask that you pay them via an unconventional method – such as using Bitcoin or other cryptocurrency. Or, they might ask you to pay into an account that seems unrelated to the company they claim to represent (e.g. an offshore account).
Invitation
Loan fee fraud was one of the most reported scams in December 2019, comprising 1 in 8 (12%) of all its scam reports. Please take care of yourselves this Christmas.
Here at Vesta Wealth, we want our clients to enjoy a restful time at Christmas – spending quality time with people they love and not worrying about their finances. We hope these ideas help you to navigate December’s spending commitments in a safe, responsible way.
If you would like to discuss your financial plan and retirement strategy, then we would love to hear from you. Get in touch with your Financial Planner here at Vesta Wealth in Cumbria, Teesside and across the North of England.
Reach us via:
t: 01228 210 137
This content is for information purposes only. It should not be taken as financial or investment advice. To receive personalised, regulated financial advice regarding your affairs please consult your Financial Planner here at Vesta Wealth in Cumbria, Teesside and across the North of England.