HMRC and ISA providers are likely to be busy over the coming days as financial consumers set out their plans for the year ahead. With this in mind, Metro Bank has named ISA investment and HMRC themed fraud as its “scam of the month” for April.
Metro Bank warned scams in general are on the rise in the face of lockdown restrictions.
In examining data from Action Fraud, it was shown there has been a 29 percent rise of clone firm investment scams in recent months, with the average loss being a “staggering” £45,000.
Additionally, UK Finance recently reported investment scams, in which a criminal convinces their victim to move their money to a fictitious fund or to pay for a fake investment, saw the highest increase in losses of any Authorised Push Payment (APP) scam type in 2020, totalling £135.1 million.
Adam Speakman, the Head of Fraud and Investigations at Metro Bank, commented on this: “Our key advice for any scam is – if you are being pressured to act quickly, move funds or share passwords you need to STOP and THINK, question and investigate further the requests in case you are being scammed.
“As the tax year comes to a close, we see a lot of HMRC scams and as the new financial year starts in April, fraudsters target investment ISA scams.
Adam concluded: “There is always an element of risk in investment – but the risk should come from the movement in market conditions, not from being defrauded by criminals.
“HMRC scams can be by phone, email or text. They have become so common, that the UK Government has published a list of their current messages, so the general public can check.
“HMRC scams are ever evolving in sophistication. We want everyone to be aware that the HMRC will never call you and pressure or threaten you in to making payments, so if you are contacted by someone purporting to be from HMRC do not engage in their requests to send funds or to share any passwords or personal data.
“Telephone numbers can be spoofed, so if a phone number looks like it’s in relation to HMRC it doesn’t necessarily mean it is – always take the caller’s details and terminate the call then check the HMRC website for the latest and common scams before calling back on a trusted number.”
Further warnings came from GBG, the identity intelligence expert, who detailed consumer trust may be at an all time low.
Recent research from the firm highlighted that one in five consumers’ identities had been stolen in 2020, and 36 percent are more worried about fraud in banking as a result of the pandemic.
In light of this, GBG noted building digital trust this ISA season will be crucial for both savers and providers as Gus Tomlinson, a General Manager of Identity Fraud at GBG, explained: “‘ISA season opens a window of opportunity for fraudsters – especially this year, with all services now operating across digital platforms.
“ISA scams can come in many forms, such as fraudsters stealing a consumer identity to move money into an ISA in their name, or fraudsters tricking consumers into transferring money to a fake company.
“As consumers seek out the best ISA deals ahead of the new tax year, establishing trust digitally will therefore be more important than ever. Our recent research shows that a third of consumers are more worried about fraud, as a result of COVID-19 – most prominently banking.
“The shift towards digital that we’ve all experienced has created a perfect environment for fraudsters to operate in, with lots of new technology tools to capitalise on this, such as caller ID spoofing or forwarding scams. We need to remember that the internet was built without ‘identity’ in mind, which means the complex set of data points which shape who we are, are now vital in keeping the wheels of commerce turning.
“They create digital trust, allowing people and providers to interact safely and remotely without opening the floodgates to fraud.
“As the risk of scams rises, so too will the importance of data analysis to unearth consumer behaviours patterns and determine transaction risk levels. For online service providers, data is the only effective route to define the degrees of separation between transacting parties, and therefore highlight if a transaction is plausible, or if it should be flagged for further investigation.”