Regulators urge consumers, companies and charities to protect themselves against scams and schemes during Covid-19.
With governments around the world trying to respond to the Covid-19 pandemic, agencies are urging consumers, charities and businesses to be extra-vigilant as fraudsters abuse people’s vulnerabilities.
Since the outbreak started, law enforcement and regulatory agencies have seen a rise in the number of scams and schemes that prey on collective fears to manipulate victims into making bad financial decisions.
More than 500 coronavirus-related scams and more than 2,000 phishing attempts were reported to the UK’s Action Fraud unit, which is governed by the City of London Police. As of 4 April, Action Fraud had received 509 reports of financial fraud, with losses amounting to £1.6 million, according to the Guardian.
Fraudulent attempts related to the Covid-19 pandemic first came to light in February, after the police received the first UK scam report on 9 February. The reported figure rose to 20 by the end of the month and March saw a sharp spike in reports, with 46 recorded between 1-13 March, reported the Financial Times. With a 400% upsurge in Covid-19 related fraud reports, Action Fraud said that total losses of £970,000 due to Covid-19 fraud had been recorded since early February.
Collaboration to end criminal activity
Police and agencies have published fraud prevention updates and advice in a bid to protect the public from coronavirus-related scams, as they expect criminals will continue to exploit public fears as the pandemic spreads.
The aim is to help consumers increase their levels of vigilance against fraud and encourage them to avoid sharing personal and financial information.
The Pensions Regulator, the Financial Conduct Authority and the Money and Pensions Service (MaPS) released a joint statement on 1 April 2020 urging savers to stay calm and not rush into making any pension decisions amid the Covid-19 pandemic.
The regulators asked savers to use the Pensions Advisory Service website for “free plain English pension guidance” and the ScamSmart website for information on how to protect both retirees and non-retirees against pension scams.
“This is a very worrying time for people,” Charlotte Jackson, Head of Pensions Operations and Consumer Protection at MaPS, said. “The key thing is to take as much time as you can and try not to panic. Most importantly, before taking any major decisions relating to your pension take the time to get independent guidance or advice.”
Mark Steward, FCA’s Executive Director of Enforcement and Market Oversight, said: “Fraudsters will exploit the coronavirus to prey on anxiety and fear of savers and investors, especially those who may be vulnerable. That’s why we’re urging anyone who is thinking about transferring their pension to check who they are dealing with and only use firms authorised by the FCA [Financial Conduct Authority].” Members of the public can check the Financial Services Register online.
“Reject all unexpected and unsolicited offers; get to know the warning signs of scams, like high rates of return which sound too good to be true, so-called special offers or pressure to make a quick decision and check our tips and advice on our ScamSmart website,” Steward advised.
“If you’re worried about your pension savings, take the time to understand what options you have available,” Charles Counsell, Chief Executive of the Pensions Regulator added, emphasising: “There is no need to rush.”
Types of financial scams
With lockdown increasing the time we are at home, working and socialising through technology, and as the surreal concept of isolation affects people throughout the UK and the world, criminals are manufacturing fake scams and schemes.
These are some key types of categories of financial fraud:
- Phishing emails with malicious links.
- Covid-19 related investment scams.
- Online and text retail fraud and counterfeit goods related to the virus. Healthcare products claiming to prevent, identify or cure Covid-19.
- Unsolicited emails and texts promoting suspiciously good deals.
- Donation or fundraising scams.
- Scams claiming to be official messages from the government, such as texts telling people they have received a fine for £250 for leaving their home more than once during lockdown.