Davis & Co LLP - Accountant Newsletter

How to avoid internet fraud - A new wave of scams

Fraudsters have unleashed a new wave of scams. We uncover the worst frauds in circulation - and show you how to avoid them.
A number of new scams have emerged in recent weeks that threaten us all.
Fraud in all its forms costs us a staggering £14 billion every year, equivalent to £231 for every person in the UK.
We uncover 11 of the latest tricks in circulation and show you how to keep your money where it belongs - with you.

1. Boiler Rooms

Financial watchdog the Financial Services Authority (FSA) contacted 38,000 people last month following the recovery of a master list of names and telephone numbers used by 'boiler room' share fraudsters. The list is the largest recovered so far by authorities.
This scam sees fraudsters contact small investors by telephone and use high-pressure sales techniques to trick them into buying non-tradable or non-existent shares - usually at high premiums. Boiler room operations operate outside the UK and promise seductive returns - so how do you stay safe?
Be sceptical if you're called out of the blue and offered shares - but if you're still interested, check the FSA register of authorised share dealers to ensure the source is legitimate. You can call the company back using the FSA details - or report them to the police if they're not.

2. ‘Crash for cash’ drivers

Insurers are warning of a scam that can result in lethal consequences - and not just for your wallet. So-called 'crash for cash' fraudsters fake motor accidents by making unnecessary emergency stops at busy junctions or roundabouts, forcing other drivers to crash into them. They then make bogus claims to the innocent motorist's insurer, often including fictitious injuries.
This dangerous scam is hard to avoid, but if you suspect someone ahead of you is driving erratically, give them a wide berth. In the event of an accident, record as much detail as possible, including names, addresses and dates of birth, and use your mobile to gather picture evidence. Also, highlight any suspicions to your insurer.

3. Work from home scams

Home-working scams, where fraudsters advertise bogus job opportunities to work from home in exchange for an upfront fee, are one of the oldest frauds in circulation. Yet OFT figures show that 17% of adults have been targeted in the last 12 months and the fraudsters' techniques are becoming ever more sophisticated.
Organised crime gangs have successfully hacked into official recruitment websites in recent months, including those operated by The Guardian and The Mirror, to acquire job-hunters' email addresses.
So how can you tell if a job opportunity is genuine? Treat any company that demands money up front with suspicion. Also, contact the Direct Selling Association, a regulatory body that any legitimate work from home opportunity must be a member of.

4. ‘Tab napping’

A new type of phishing scam designed to attack your computer and steal bank details has been unearthed by security experts. Known as 'tab napping', this scam exploits internet security flaws to target web users who open lots of tabs on their web-browsers at the same time. The program replaces dormant tabs with fake pages, set up specifically to steal your data.
This is a sophisticated scam, but it's also comparatively easy to avoid. Always check the URL is legitimate on any site you visit before you enter your details and always check the website has the prefix 'https://' and a legitimate security certificate to prove its secure. You can do this by clicking the padlock icon on the bottom right-hand corner of your browser (top left for Apple users).

5. Volcanic Ash scams

Email scammers typically exploit events in the news to target vulnerable people. And with thousands of travellers still awaiting news of refunds for flights cancelled following recent closures of European airspace, criminals have responded with depressing predictability.
Emails are in circulation inviting recipients to apply to a compensation fund from a person by the name of Frank Adam at the Civil Aviation Authority. In reality there is no Frank Adam and no fund - the emails are intended to lure victims into fraud. The criminals will either demand an upfront fee or use your personal details to commit fraud. As always, treat these kinds of emails with suspicion. Call the organisation in question by finding their number on their website. Do not follow any links from the suspicious email as these could lead to a fake phishing site.

6. Email scams

The most common way for fraudsters to try to rip people off is via email, according to the OFT, with nearly three-quarters of UK adults having received a scam email over the past year. Many of these are crude "phishing" emails or badly spelled adverts for drugs such as Viagra, but not all bogus emails are so easy to spot.
Emails were circulated earlier this year purporting to be from HMRC offering tax refunds from email addresses with the hmrc.gov.uk suffix. Other emails have been designed to look like those from academic institutions and local councils, with seemingly authentic addresses and sophisticated graphic designs, making them look like the real thing.
In these instances, remember that no public body - not your bank or any government institutions - will ever contact you by email to demand your personal details or your PIN.

7. Distraction scams

In so-called "distraction" scams or burglaries, criminals call on people at home - often in pairs - and use tricks or distractions to gather their personal details or to gain access to their homes in order to commit burglary. In one recent case, a bogus salesman kept a Northamptonshire woman talking while his three-year-old daughter stole from her purse.
Perpetrators operate under an array of guises, including salespersons, council staff or workers from utility companies. If you're ever called at home, ask for ID and if you're still not satisfied, call the company they say they are from independently.

8. Lonely hearts scams

Foreign criminals are using legitimate dating websites to target single Britons and dupe them into parting with cash, according to a new warning from the Serious Organised Crime Agency (Soca). Gangs are creating fictitious online profiles with photos of attractive men and women and sending hundreds of thousands of emails and letters each month.
The scam starts when fraudsters ask interested parties for small sums, perhaps to help pay for stamps or telephone calls, but the demands for cash soon grow larger. If you're ever asked for money via a dating website, listen to your head, not your heart and say no.

9. Overseas holiday clubs

This scam sees people contacted either at home or through 'prize draws' and offered luxury holidays at bargain-basement prices. People are offered free holidays or gifts, or are told they have won prizes, in return for attending a presentation at a plush hotel. The presentation will seem convincing, but you'll soon find the promises made prove false.
The salespeople will most likely demand an annual 'subscription' fee in exchange for the holiday, and you may later find out that the holiday isn't so 'free' after all, once you're charged for flights and extras. If you're still tempted, take away the contract and come back in a few days and make sure you get written cancellation rights.

10. Festival ticket scams
Music fans were being targeted by  Bogus websites promising tickets for sold-out events such as Glastonbury and V Festival left thousands of fans out of pocket last summer - and new ones are emerging in their place to trap unwary consumers.
One in 12 British ticket buyers is caught out by bogus outlets every year to the tune of £80 on average. Many of these websites use seemingly official names to fool punters, so they're not easy to spot. If you're unsure, do your homework. Look for a UK registered office, a UK phone number or a VAT registration number to ensure the firm is legitimate.

11. Card fraud
Thanks to Chip and PIN and consumer initiatives, we're wising up to the threat of card fraud at home, but overseas it's a very different story. A recent YouGov survey found that a third of us are more worried about being victims of card fraud on holiday than at home, so how can you stay safe on holiday?
Never let your card out of your sight when you do a transaction and store all receipts and records safely in your bag or wallet. Use caution at cash points and if someone makes you feel uncomfortable, cancel the transaction and use a different machine. Lastly, keep your bank's 24-hour phone number with you at all times.

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