How to avoid charity fraud
As the crisis in Ukraine continues to make headlines, fraudsters and scammers may look for ways to exploit the good nature of people wanting to help those affected by the war. If you are looking to provide support to a cause by donating to a charity, here are a few tips to do it safely:
• Donate via the organisation website, or approach the charity directly for guidance
• Stick to well-known organisations that have a history of work in the field and have presence or charity partners in Ukraine.
• Avoid clicking on links or downloading attachments in unsolicited emails or social media posts, especially from unknown sources. This may be an attempt to lure you into downloading malware to your device.
• Be wary of social media posts that promote a charity unless you verify that it is a legitimate organisation. Even if a friend has recommended it or shared the post, they may have not done their research.
• Don’t give in to pressure. Fraudsters will attempt to use the urgency of a crisis to rush you into making a donation.
Identity theft can lead to fraud that can have a direct impact on your personal finances and make it difficult to obtain various forms of credit until the matter is resolved. Fraudsters can use your identity to obtain credit or open a bank account, order items in your name, take over your existing accounts and even obtain genuine documents like passports and driving licences.
To avoid identity fraud, keep important documents in a safe place and when disposing of them make sure you shred anything containing personal information. Never give out personal details like account numbers, PIN, passwords or one time passcodes to anybody. You can also regularly get a copy of your credit report from the various credit reference agencies. When your monthly statements arrive, ensure you review them to spot any unusual transactions.
Online purchase scams:
You spot something for sale online, for example a car, concert tickets or tickets to a sporting event. The price seems to be too good to be true. The seller asks you to pay by a less secure method than the one the selling site recommends. You go ahead and transfer the money, to ensure you don’t miss out on this bargain. However after transferring the money, you never hear from the seller again and the item you purchased never arrives.
Always ensure you use a reputable website or app to purchase goods online.
Hacked email account:
Fraudsters may send you an email that appears to look like it was sent from a trusted person or company. They tell you that you need to make payment and the companies bank information has changed. You may well owe that person or company money, so you think nothing of it and go ahead and transfer the funds.
This may be because the company or person’s email account has been hacked. If you receive a request to make a payment, always get in touch with the requestor using the original contact information you received. Make sure the request is genuine before you make the payment.
Be careful - fake invoices sent by email can be very convincing!
A tradesperson knocks on your door, and informs you that you need urgent work doing to your home, for example a loose roof tile. The tradesperson goes ahead and does the work for you and overcharges you for work that wasn’t needed. They may even ask you to make a part payment for materials and never return.
Don’t rush into getting work done by a person knocking on your door. Get quotes from reputable tradesmen before committing to having the work done.
You meet someone new online and they seem genuine. But can you be sure? They may be abroad and ask you for financial help to cover travel expenses to come and visit you. You trust them and you’ve developed strong feelings for them. You decide to transfer money to them to help them, but you never hear from them again.
Keep to conversation on a reputable dating agency site or app and never send money to a person you have only met online.
Safe account scams:
You receive a call from a trusted organisation such as your bank or building society, or even the police. They inform you that your money is as risk and that you need to move your money to a safe account that has been set up for you. You transfer the money in good faith, but your money is now gone and you later find out that your bank or building society never contacted you.
Never act on a phone call or contact out of the blue telling you to transfer funds. A genuine organisation will never ask you to do this.
Advance fee scams:
A fraudster may contact you informing you that you need to make an upfront payment to them. They might tell you that you have won the lottery and have to pay a fee up front to release the funds. Or it may be about a loan you have enquired about, and they tell you to pay a fee up front before the funds will be sent to you. You make the payment but never receive the funds that were promised and never hear from them again.
If something seems too good to be true – it probably is! Never transfer funds without checking to ensure the request is genuine.
A fraudster contacts you informing you that they have investments available to you that will make you money. They ask you to transfer funds to invest in something like alternative energy or precious minerals. However the investment does not exist and after you transfer the money, you never get any returns and your money is lost forever.
The Financial Conduct Authority (FCA) have a website called ScamSmart which offers a warning list, to you can check the risks relating to potential investments. You can also see if the company that has contacted you is authorised by the FCA.
Remote access scams:
A fraudster purporting to be from an internet provider contacts you and tells you there is a problem with your computer or device. They tell you they can access your device remotely to resolve the problem. You grant them access when the ‘pop up’ requesting access appears on your screen. They tell you that they have resolved the issue, and ask you to make payment to them by asking you to your online bank account. You make the transfer and they now also have your login credentials.
Don’t allow yourself to be rushed into allowing remote access. Ensure you know who you are dealing with and if they can be trusted. Never log into your online bank account while someone is remotely accessing your device.
You could be at risk from pension fraud even if you're not a pensioner. Unfortunately, following government reforms introduced in April 2015, pension scams have become increasingly common.
It’s not just retirees who are affected, because defined contribution pension holders can now access their entire retirement fund from age 55. People are being encouraged to withdraw from their pensions and put money into schemes that offer large returns for a short-term investment. The 'investment' is actually deposited into a fraudulent account.
If you're under 55, you might be approached by someone promoting the benefits of early pension release schemes, and encouraged to access your pension early. The funds would actually be transferred into overseas schemes (with extortionate fees) or placed into high risk investments. And once money is transferred into an early release scheme, the scammers could take all of your pension pot.
Early pension release schemes are not authorised by HMRC and funds withdrawn will be charged anything from 55% to 70% in tax. The government only allows early access to pension funds in very limited circumstances. If you’re considering entering a scheme to access your pension before 55, the Financial Conduct Authority (FCA) recommends seeking professional advice.
Firms, individuals and other bodies regulated by the FCA are unlikely to contact you unexpectedly or pressure you into making a decision. If they do, you should report them to the FCA straight away. If you’ve been approached by someone, you can check if they’re regulated by searching the Financial Services Register online – there's no charge.
If you're approached about your pension, warning signs may include, being contacted out of the blue with cold calls, texts, emails or by door-to-door salespeople. Feeling pressured into making a quick decision by pushy sales techniques or being told you're being offered the best deals, like guaranteed returns.
This is when someone gives you a cheque they know you can’t cash. There are several variations of this scam, for example:
• Handing over counterfeit cheques, which are made to look real by the fraudster, or forged cheques, which are genuine but stolen from somebody else with the signature forged
• Altering or tampering with a cheque. It might not be noticeable or visible to the naked eye, but will be rejected by the bank
• Making an overpayment and then asking for the change. A fraudster will pay you using a fake cheque for more than the agreed value, with an excuse for the overpayment. They'll ask you to send back the difference, in cash or an untraceable money transfer. The cheque will bounce and you’ll never hear from the fraudster again.
Keep yourself safe by:
• Only accepting cheques from people you know and trust
• Asking for a different means of payment if it involves a lot of money
• Use a pen when writing a cheque. Write clearly and put a line through empty spaces.