Every 15 seconds in UK is committed a financial fraud. Between January and June 2016 there have been 1 million such incidents and those are only the reported ones, shows data of the banking and payments industry organization Financial Fraud Action UK (FFA UK).
This represents a 53% increase from last year and contains data only on the reported cases. The financial fraud includes all types of credit and debit card, online, cheque, e-mail and text scams, cold calling, phishing, etc. In the category of financial fraud also fall scams by unregulated forex and binary options brokers.
According to the British Crime Survey fraud and cyber crime account for nearly half of all offenses. In 2015 financial fraud losses reached £755m – a 26% increase on the previous year.
A research presented by the FFA revealed that 73% of people claim they are aware of the methods the fraudsters use, yet 26% admitted they have provided personal details to people claiming from their bank.
Of those who shared details, 43% said they did so because they felt the caller seemed genuine, while 39% said they felt pressured. Of those who became victims of financial fraud, 24% admitted they fell for it because the fraudster seemed very convincing. Another 37% smelled something fishy, yet continued with the transaction and 23% had an epiphany after the conversation had finished.
“Banks and other financial service providers work hard to protect their customers, using highly sophisticated security systems,” Katy Worobec, Director of FFA UK, said. “Last year, banks stopped £7 in £10 of attempted fraud from happening. But as the banks’ systems get more advanced, fraudsters turn their attention elsewhere and sadly this often means tricking people out of their personal details and money. Alongside the banks, people can also play an important part in helping us to stop financial fraud and protect themselves.”
There is no official data on how much UK residents have lost to the little more sophisticated scams conducted by unregulated forex and binary options brokers, in spite all the warnings put out by the Financial Conduct Authority (FCA).
Other regulators, however, are a bit more specific. France’s AMF, for example, released data that in six years the French have lost 4 billion euro from trading on “fraudulent sites”.
Australia’s ASIC only recently reported that since the beginning of 2016, Australians have lost $3 million to binary options scams.
In the summer the Canadian provincial regulator, the Manitoba Securities Commission told the story of three friends who lost CAD 144 446 to the fraudulent binary options broker PluStocks.
Here are some of the common sense advise the FFA provides in order to avoid financial scams:
1. Never disclose security details, such as your PIN or full password – it’s never right to reveal these details
2. Don’t assume an email request or caller is genuine – people aren’t always who they say they are
3. Don’t be rushed – a bank or genuine organisation won’t mind waiting to give you time to stop and think
4. Listen to your instincts – if something feels wrong then it is usually right to pause and question it
5. Stay in control – have the confidence to refuse unusual requests for information