10 ways to avoid a finance scam

Simply staying safe online is a concern for many, and it's a legitimate worry - the desire to harm or damage others' data is the reason anti-virus products exist. Scams have always existed and they adapt as times change, so it is not surprising that many modern scams focus on working from home, making money online and trying to collect data from email with a process called 'phishing', which is harbouring data collected by clicking links in an email.

The reason scams have been able to exist for so long is that we can get so absorbed by what is being said and how much we want it to be true that we overlook, ignore or even justify the big warning signs that tell us something isn't quite right.

Our commitment to helping people with money extends to helping them stay safe, so here are our top 10 ways to spot a finance scam online and maintain your money - and data.

1 Pension Ensure the company is real and legitimate

In the past there was a degree of security in an advert being on the radio or television, insofar as it heightened the chances of the advertising company being genuine. This sadly is not the case online. If you're unsure of a company then the first thing to do is research it and check that it is real and legitimate. Remember that just because a company exists doesn't mean it's operating ethically. If the business says it is registered with the FCA, it will be listed on the register, which can be accessed on the FCA's website. Thanks to Google and other search engines it has never been easier to find out a company's details, including whether people think it is a scam or problematic in other ways. Often, companies that people have problems with will appear high on Google's results on forums, with multiple people explaining in detail who the company is and why it should be avoided. This information is golden when you're researching whether you should trust them or not.

2 PensionDon't supply banking or credit card information

This is hugely important, because once someone has this information they can cause serious financial harm to you, or even commit identity theft. If the Internet had a rulebook, the first point would be to not provide such information anywhere except in specific circumstances - verified shopping websites, for example, or registering on a site like PayPal. And always remember that legitimate outlets like PayPal and banks will never ask for banking information in an email.

3 PensionBe wary of unrealistic claims

Many scams operate, and thrive, on the premise that they can deliver something everyone wants, at minimal effort, so that our emotion rather than logic prevails. But when we stop to think about it, the offers can sound too good to be true. Do you really think you can earn £700 a day on your computer at home? If it's possible, why would the person telling you be divulging the information? Chances are the scam operates by luring the victims in and asking for money, which leads on to the next point...

4 PensionDon't send any money

There may be times when money is genuinely needed upfront, although it's worth noting that many legitimate companies will absorb this cost initially and earn it back from portions of sales until it is repaid. Either way, if the offer doesn't seem unrealistic but does ask for money upfront, don't rush into things - take your time to research the company and what it's offering, and see if other reputable sources are providing the same thing for free.

5 PensionAsk questions

Rushing into things and making hasty decisions is a sure way of later regrets, so it really isn't possible to overstate the importance of thinking a decision over and asking all the questions you can think of - and what other people can think of.

6 PensionDon't feel pressured or obligated

If a seller doesn't want to let you think something over and sleep on it, walk away. The pressure to sign on the spot is a warning sign that it may be a scam.

7 PensionBeware the fluency

You may have noticed that one of the prominent themes of the more obvious email scams is the limited grasp of the English language. Take the following as an example:

"I will not fail to bring to your notice that this transaction is total hitch-free and you should not entertain any fear because good arrangement has been outlined for successful conclusion.

If you are willing and capable to handle this business with me in full confidence & trust, please do not hesitate to Reply me back

I look forward hearing from you."[1]

Dickens it isn't, and it serves as a warning that the author is not familiar with the country's native language - an unlikely scenario for a bona fide opportunity, as even if a legitimate outlet did not speak the language fluently it would likely hire a translator to ensure a professional image. So be very careful to look out for casual phrasing, missing words, bad grammar and misspelling. This is not to suggest any typo signifies a bad deal, though, so just use common sense when judging an offer.

8 Pension Beware "guaranteed returns"

 If a person or company tells you there will be a guaranteed return or a phenomenal return on investment in a specific, usually short, timeframe, then alarm bells should be ringing. A scheme may have a high chance of return, or a guaranteed interest rate for a period of time, but that's usually as far as a legitimate statement can go. Remember to ask yourself the key question when someone is espousing the benefits of something, 'What's in it for them?'

9 PensionDon't believe everyone else is doing it

One popular scamming method is to wax lyrical about how many people are enrolled in the scheme. While it's good to know that you won't be the only one taking part in something, numbers are not substitutes for information, so if you get informed on how many people are taking part but aren't given solid details on what is involved, how it works or what you can expect, the chances are someone is trying to scam you.

10 PensionPay attention to the little details

Particularly in email scams, fraudsters will go to great lengths to make their email look like the real deal, complete with the company logo and font, and some even manage to make the email display name include a real company name, such as PayPal. Don't dive straight into following the instructions though; first, check the sender's email address - the name may say a company but if the address is actually 'info@abz23.com' then you know it's fake. Similarly, if it's 'support@paypal-uk.com', it's a fake, but with the extra maliciousness of working in the real name to appear real. If in doubt, contact the real company to verify the information in the email.

If none of the above applies or you're still in doubt, remember the one golden rule that trumps all others: if it sounds too good to be true, it probably is.

Have you been scammed in the past? Let us know on Twitter or Facebook.

Call 0800 304 7288 for a friendly chat about your pension

The details provided in this article are for general information only and are in no way deemed to be financial advice. All of the material is correct as of the publication date, but could be out-of-date by the time you read the article. For our latest information and news, please see our articles section: https://www.portafina.co.uk/whats-new

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