As the UK continues to grapple with its cost-of-living crisis, scammers are taking advantage of people’s increased financial vulnerability.

In the first quarter of 2023 alone, around 40 million adults were targeted by scammers, Citizens Advice found.

Losses are steep, with £580 million lost to financial fraud in the first six months of 2023, according to figures from UK Finance.

With day-to-day living costs continuing to rise, scammers are likely to target those who are struggling, with schemes that run the gamut from fake ‘investment opportunities’ to parcel delivery scams.

According to a survey by the Global Anti Scams Alliance (GASA), around 10% of UK adults fell prey to a scam in the last 12 months, while 53% said they have come across more scams than usual over the last year.

Below are common scams to watch out for in 2024.

Impersonation scams

During an impersonation scam, fraudsters pose as an authority figure to convince their targets to move money or part with sensitive information.

Over the course of 2023, Lloyds Bank saw a 13% uptick in the number of impersonation scams its customers reported.

According to Lloyds’ data, scammers were most likely to impersonate police or bank staff. Victims of these fraudsters are often told their money is ‘unsafe’, and asked to transfer it to an account controlled by the scammer. 

Although victims lost £5,318 to these scams on average – a 31% reduction compared with 2022 – losses can be far steeper.

CEO fraud, where criminals impersonate senior staff members at their victims’ company, can be especially costly. On average, victims lost £10,918 to this type of impersonation scam in 2023.

During a CEO impersonation scam, criminals convince employees to transfer them money under various guises, such as an ‘urgent’ unpaid invoice, or convince them to purchase gift cards ‘for colleagues’ under the promise of reimbursement.

Liz Ziegler, fraud prevention director at Lloyds Bank, said: “While your bank is always working hard to keep your money safe, it’s important people take steps to protect themselves and be really wary of unexpected calls or out of the blue requests for help.

“If something doesn’t seem right, take a step back and verify who you are actually speaking to.”

To avoid impersonation scams, she recommends being cautious of any messages you receive from unknown contacts – even if they claim to be from an organisation or person you trust.

She adds that your bank, the police and your employer will never ask you to move money or install software. If in doubt, contact the person or organisation a message claims to be from to double check it’s really them.

Loan fee fraud

With loan fee fraud, opportunistic criminals charge victims a fee for fake loans which they never receive.

This type of scam is known as loan fee fraud, and it costs each victim £255 on average.

Loan fee fraud is usually more prevalent in the summer, as consumers look towards credit to manage the extra costs that arise this time of year, such as holidays, childcare and entertainment. 

According to Financial Conduct Authority (FCA) data, loan fee fraud has become more prevalent in recent years, as criminals respond to the uptick in households relying on credit to make ends meet during the cost of living crisis.

Between 2021 and 2022, the FCA reported a 26% uptick in reports of loan fee fraud.

In a survey of 2,000 UK adults, the regulator also found that 21% said they had used a loan to cover summer expenditure in the past, or planned to.

Steve Smart, executive director of enforcement and market oversight at the FCA, said: “For fraudsters, this provides the perfect opportunity to take advantage of people considering how to make ends meet over the summer months.”

To spot loan fee scams, the FCA recommends looking out for the following warning signs:

• Cold calling or emailing unexpectedly
• Asking for an upfront fee
• Asking you to pay quickly, or through an unusual channel

It’s also urging consumers who need a loan to check their would-be provider is FCA authorised. You can do this by checking the FCA Register.

Authorised push payment scams

During an authorised push payment (APP) scam, victims are tricked into sending money directly to a criminal.

According to UK Finance, which produces an annual fraud report, £239.3 million was lost to APP fraud in the first six months of 2023 – with 116,324 cases recorded by UK banks and building societies.

More than three quarters of these cases (77%) originated online, and many were purchase fraud scams – where fraudsters offer goods and services that never materialise. 

Roughly 73,000 cases of online shopping fraud were reported to police in England and Wales between March 2023 and 2024, Action Fraud and ONS data reveals.

However, the real impact is likely much higher, since the National Crime Agency estimates that 87% of fraud cases go unreported.

Criminals may also pose as legitimate organisations to instil trust in their victims before requesting money. In 2022, £82.3 million was lost to criminals posing as bank staff or the police, for instance.

According to analysis by Revolut, social media is a key channel for APP scams, with Meta platforms Facebook, WhatsApp and Instagram accounting for 60% of all scams reported in 2023.

While just 17% of APP fraud was carried out over the phone in the first half of 2023, these cases accounted for 45% of losses. 

These losses are likely to be cut down when the government’s new fraud strategy – which places a blanket ban on cold calls offering financial services – comes into play. 

With this measure in place, individuals can assume that any unexpected calls offering financial services are a scam. 

Kate Frankish, chief business development officer and anti-fraud lead at Pay.UK, said: “Fraudsters move fast and adapt quickly, coming up with novel methods and using technology to their advantage. This is reflected in the steep rise of online scams.”

She added:  “To tackle this issue, regulators and law enforcement must keep up with new technology and work more closely with online social and technology platforms, telecommunications providers and financial institutions.”

New rules from the Payment System Regulator mean that, from 2024, victims of APP scams must be reimbursed by their bank or payment processor for their losses.

Parcel delivery scams

The internet is a massive shopping outlet, as evidenced by the fact that over a quarter of UK retail sales in March 2023 took place online, according to the Office for National Statistics (ONS) – and opportunistic fraudsters are taking advantage through parcel delivery scams.

During these scams, criminals pose as legitimate delivery companies to convince victims they need to pay additional fees or reschedule a delivery, in a bid to access their cash, personal information or bank details.

Of the 40 million UK adults targeted by scammers in the first quarter of 2023, almost half (49%) encountered this kind of scam, Citizens Advice reports.

Identity theft

Cases of identity theft — when fraudsters use a victim’s name and personal information to access their cash or take out credit in their name — have also been on the rise.

A 2024 survey by digital payment platform, Adyen, found that 33% of UK consumers said they fell prey to identify fraud in 2023 (losing £311.09 on average), compared with the 23% who experienced identity fraud in 2022.

In the majority of identity fraud cases (86%), victims’ personal details were stolen from online sources. These stolen details are often used to make purchases, accounting for £726.9 worth of losses amongst UK adults in 2022 alone, according to UK Finance data.

Mike Haley, chief executive of Cifas, the fraud prevention service, said: “The large majority of fraud and financial crime starts online, and the increasing use of digital technology has led to greater opportunities for criminals to commit fraud.” 

Criminals often pose as legitimate organisations – or even government bodies – to trick their victims into sharing personal details or transferring money.

With the tax self-assessment deadline of 31 January now passed, HMRC is warning customers to be on the lookout for fraudsters offering fake tax rebates.

In the 12 months to January 2023, HMRC received more than 207,800 reports from the public about suspicious contact, up 14% compared with the previous 12 months.

Some scammers use the promise of rebates to trick customers into sharing personal details, while others threaten would-be victims with the prospect of arrest for tax evasion unless they update their tax details. 

Laura Suter, head of personal finance at investing platform AJ Bell, said: “The move to cut the tax-free limits on capital gains tax and dividend tax, as well as lower the threshold for the additional rate income tax band, means that more people will be filing a tax return next year. 

“Many of these people filing will be doing so for the first time ever, navigating a complicated system often without help. It means they are far more likely to fall prey to scammers who send a text asking for details or promising them a tax rebate.”

HMRC says it does not phone customers out of the blue, make threats, or ask you to transfer money. If you think you’ve been targeted by one of these scams, you can report it by forwarding suspicious text messages to 60599, and suspicious emails to phishing@hmrc.gov.uk.

According to a recent survey by Nationwide, around 17% of UK adults have had their identity stolen or used fraudulently. 

Ed Fisher, head of fraud policy at Nationwide, said: “We urge everyone to be vigilant by protecting their details and observing a few basic tips – don’t overshare your information unnecessarily, consider who is following your online activity, and protect your devices and accounts with both security software and strong passwords or codes that are not the same.”

Ghost brokers

City of London Police has warned young drivers about the ongoing threat of ‘ghost brokers’ — scammers who sell invalid car insurance policies at unrealistically low prices.

After making a sale, the scammers send their victims fake insurance documents, or take out a real policy but falsify details such as the driver’s age, address, and history to bring down the premium. 

Most victims of ghost brokers don’t realise they have been scammed until they need to make a claim on the insurance policy. 

Ben Fletcher, director of the Insurance Fraud Bureau (IFB) said: “Young and vulnerable people are constantly being targeted online with fake car insurance deals that are too good to be true, and if they fall for them they’re immediately left out of pocket and face having their car seized by the police for no insurance.

“The cost-of-living crisis means it’s never been more important for people to safeguard their personal finances against fraud.”

Ghost brokers tend to canvass victims via social media or word of mouth, so when you need to take out a car insurance policy, be sure to use a reputable comparison site or broker, or go direct to the provider. 

Insurance fraud

Fraudulent insurance claims cost the industry a staggering £1.1 billion in 2022, according to data from the Association of British Insurers (ABI).

When fake claims are made, fraudsters forge evidence to get an insurer to pay out for an incident that never happened, or greatly exaggerate a legitimate claim. 

While such fraud targets insurance companies rather than individuals, the effect is to push up premiums for everyone.

Although the number of fraudulent claims dropped by 19% between 2021 and 2022, their average value climbed 20%, to £15,000, in the same period.

Fraudulent motor insurance claims were the most common, accounting for 59% of cases. 

Mark Allen, assistant director at the ABI, said: “As financial hardship increases, previously honest customers could be tempted to ‘act in the moment’ to exaggerate claims.

“With many households and businesses continuing to face rising costs, now more than ever honest customers expect insurers to weed out the cheats and focus on paying genuine claims as quickly as possible”If you suspect insurance fraud has been committed, you can report it anonymously to the IFB.

Charity fraud

The UK’s Charity Commission – which regulates charities in England and Wales – has cautioned the public to make donations carefully. 

Criminals have been known to replicate legitimate charity websites, and contact individuals via email requesting donations for fraudulent appeals. 

To ensure you are donating to a legitimate charity, Action Fraud recommends checking its registration number. All charities with an annual income of £5,000 or more must be registered, which means they are obliged to follow rules set by the Charity Commission and release annual reports. 

When making a donation, Action Fraud also suggests navigating directly to your chosen charity’s website rather than following email links, to ensure you reach the genuine site. 

If you suspect an appeal is not legitimate, you can report it to Action Fraud. 

Gerald Oppenheim, chief executive of the Fundraising Regulator, said: “Please carry out our recommended checks before donating money or goods to make sure you are giving to a genuine cause and that your generously donated money reaches its intended destination.”

Investment fraud

Investors are also at risk of being targeted by scammers, the Pensions Management Institute (PMI) has cautioned. 

Around £2.6 billion was lost to investment fraud in the UK between 2020 and 2023, according to PMI’s analysis of National Fraud Intelligence Bureau data.

More than £527 million was stolen in 2023 alone, with the average victim losing almost £20,000.

So-called ‘boiler room’ scams are the commonly reported type of investment fraud, accounting for losses of £553 million between 2020 and 2023. During a boiler room scam, fraudsters apply pressure tactics to persuade their victims to ‘invest’ in shares or bonds that are worthless or non-existent. 

Often, these criminals promise exceptionally high returns and tell victims they need to act quickly.

Robert Wakefield, president of the Pensions Management Institute, says: “It is concerning that every year thousands of people are losing millions of pounds to financial scams in the UK. The number and sophistication of investing scams is ever-growing.

“By maintaining a healthy dose of scepticism and training yourself to spot some common red flags, you may be able to protect yourself and your loved ones from becoming victims.”

Losses show no sign of slowing in 2024, with Metro Bank customers losing over £4 million to investment fraud between 1 January and 2 April. 

Baz Thompson, head of fraud and investigations at Metro Bank, says: “Scammers will go to extraordinary lengths to persuade, entice and defraud investors using sophisticated techniques from fake websites to posing as financial advisers to create credible investment scenarios.”

He also recommends checking the Financial Conduct Authority’s (FCA) warning list, which lists unauthorised firms and websites, before committing to an investment.

Pension fraud

Fraudsters may also persuade their targets to withdraw a portion of their pension fund, which the scammer promises to reinvest for higher returns. 

To avoid these scams, it’s best to hang up on anyone who contacts you unprompted to discuss a ‘pension review,’ only dealing with financial advisors who are FCA regulated, and being wary of anyone offering ‘guaranteed’ returns on investments.

It’s important to bear in mind that if you are under 55, it is almost never in your best interest to make a pension withdrawal. 

Unless you are too ill to work, have been diagnosed with a terminal illness, or have a ‘protected retirement date’ that stipulates you can retire before age 55, you will be hit with a 55% tax bill on the withdrawal.

Bear in mind that cold calls relating to pension schemes have been banned in the UK since 2019,  so any unsolicited calls about your pension are likely to be fraudulent. The government has also announced that a blanket ban on cold calls offering financial services will soon come into effect.

Tips for avoiding scams

Virtually anyone can be impacted by a scam. According to research by Outseer, an anti-payment fraud software provider, men and women are equally likely to fall victim, and scams are reported across age ranges. 

Those aged 20 to 39 reported the most instances of fraud (around 125,800 cases), while those over 80 reported the fewest (around 13,700 cases). However, those in higher age groups who did report scams tended to lose more money.

Mark Crichton, chief product officer at Outseer, said: “There is no profile of a typical fraud victim — every business and consumer is at risk. And for those working to tackle fraud, it’s unhelpful that there remains a perceived ‘image’ of a victim.”

To avoid being the victim of one of these scams, Citizens Advice suggests looking out for key warning signs:

• An offer seems too good to be true.  Scammers lure consumers in with promises of cheap deals or high-returns. If something seems too good to be true, Citizens Advice warns, it probably is.
• Communications don’t appear genuine. It’s common for scammers to impersonate legitimate organisations such as energy companies or government bodies. If in doubt, get in touch with the company directly to check if the communication is from them.
• You are being pressured to act quickly. One tactic scammers use is putting pressure on their victims to act quickly, with promises of limited-time deals, or warnings of negative consequences if action isn’t taken. If you are being asked to transfer money or provide personal details urgently, you may be the target of a scam.
• You are being asked to use an unusual payment method. If an organisation you have dealt with in the past is asking you to pay in a new way — such as transferring money to an account you don’t recognise, or using a new payment link — the request may not be legitimate.
• You have been asked for personal information. If you receive an email or text message asking you for information such as a PIN or password, do not provide your details. Genuine companies will not ask you to send these details over text or email. 

According to the GASA survey, 66% of people who fall victim to scams don’t report it. However, when fraud is reported victims often get their money back. In the first half of 2023, 64% of APP fraud losses were returned to customers (£152.8 million), UK Finance figures suggest.

If you are ever in doubt that an email or text is legitimate, contact the company the message claims to be from directly. Make sure you get in touch using the organisation’s official channels rather than details provided in the suspicious message.

To help consumers avoid scams, the Home Office is also set to launch a cross-government anti-fraud campaign in early 2024.

The campaign aims to use ‘clear, consistent and effective messaging’ to make it easier to spot, and report, scams.

Jane Parsons, consumer expert at Citizens Advice, says: “With the volume of scams on the rise, it’s important for us all to take steps to safeguard ourselves and others against scams.”