One of the more unwanted consequences of the recent coronavirus pandemic has been a reported rise in the number of scams. Fraudsters are taking advantage of the panic currently surrounding the virus, with Action Fraud reporting that there were 105 reports of fraud relating to Covid-19 since the beginning of February, with total losses reaching £970,000.
The organisation reported a spike in fraud reports after March 13th, with the majority of reports relating to online shopping, ticket fraud, charity fraud and lender loan fraud, as well as coronavirus-themed phishing emails.
The National Fraud Intelligence Bureau, which coordinates the police response to fraud, has also reported a spike in scams. The Bureau says that, since the beginning of February, it had received reports of 104 cases where fraudsters had taken advantage of the outbreak, with losses totalling almost £1 million.
Action Fraud say that roughly half of their coronavirus scams related to fake face masks, while Tony Neate of anti-fraud group Get Safe Online said he had even seen cases of fake coronavirus cures and treatments.
In one incident reported to police, a member of the public spent £15,000 on face masks which never arrived. The City of London Police have reminded the public to research online sellers if they do not already know and trust them, perhaps by asking a friend or family member for advice. Most shoppers who use a credit card should be protected by the existing laws.
Another example of fraud has seen scammers offering cheap flights to capitalise on the confusion around current international travel arrangements.
While many scams relate to products, there has also been a rise in email scams concerning investment schemes, pensions and trading advice. These include:
According to Action Fraud, one known tactic is that emails claim to come from official organisations such as the World Health Organisation (WHO) and offer fake health advice or claim to be able to provide a list of infected people in your area. If you click on a link you are taken to a malicious website or asked to make a payment in Bitcoin.
Detective Superintendent Estelle Mathieson, of Greater Manchester Police, says: “There is currently a lot of publicity surrounding coronavirus and it has come to our attention that fraudsters are using what is a time of uncertainty for many and exploiting innocent people out of their hard-earned money.
“It is likely that nationally, scams of this type will rise as the virus situation continues.”
In recent weeks, consumers have been warned that scammers could turn their sights to consumer’s pensions, particularly as clients approaching retirement have been seeking professional advice following the short-term pension losses caused by stock market falls.
Between 24 February and 23 March 2020, the FTSE 100 index fell by around 30%. Even though clients are typically invested in a balanced portfolio, many have seen the value of their pension pot fall significantly over the past couple of months.
Analyst Tom Selby said: “While the country hunkers down in the hope of slowing the spread of the coronavirus, the economic fallout will inevitably lead to an increase in the number of vulnerable or potentially vulnerable people in the UK.
“In such an environment, unscrupulous scammers will already be plotting ways to take advantage during what for many will be a time of serious financial strain.”
Email scams often claim that they can allow savers early access to their retirement savings – and this may be particularly enticing if household incomes fall due to uncertainty and unemployment caused by the coronavirus pandemic.
Any consumer taking advantage of such an offer could see them hit with a 55% unauthorised payment charge from HM Revenue and Customs, as well as fees charged by the scammers.
Mr Selby added: “Scammers’ tactics are evolving all the time and increasingly we see complex schemes promoted online through social media. This virtual wild west is a natural home for fraudsters, with governments around the world struggling to create meaningful protections for consumers.”
Common signs of pensions scams include:
If you are considering a pension or investment offer you have seen, speak to us first. Get in touch to find out more.