How to spot a financial scam

Financial scams are on the rise. Here’s what to be aware of to make sure you don’t fall victim to one, and what to do if you or someone you know is scammed.

Criminals stole over £1bn through fraud in 2024, UK Finance’s latest fraud report has revealed. 

There were over 3.3m confirmed cases of fraud in 2024, a 12 per cent rise from 2023. However, banks prevented £1.5bn in unauthorised fraud, a 16 per cent increase from the year before. 

The total amount lost to fraud in 2024 remained largely unchanged from 2023 and was actually lower than the amount recorded between 2020 and 2022.

But case numbers rose to the highest number among comparable data. 

So, how can you avoid falling victim to a financial scam?

Most common financial scams

Cases of authorised push payment fraud, which occurs when someone is tricked into sending money to a fraudster posing as a legitimate payee, fell 20 per cent in 2024, the lowest number since 2020.

However, the biggest amount of APP losses came from investment fraud, where victims are convinced to move their money to a fake fund or to pay for a fake investment.

Victims lost £144m through this type of fraud in 2024, a 34 per cent increase from the year before. 

The most common type of fraud cases was purchase scams, where a victim pays for goods or services in advance and never receives them. 

APP fraud is being driven by “the abuse of online platforms and telecommunications,” the report said, with 70 per cent of APP fraud cases beginning on online platforms. 

“Several scam techniques have been around for years. Often, approaches are made by phone, where the victim is put under pressure to act fast or miss out,” says Sarah Coles, head of personal finance at Hargreaves Lansdown. 

“However, other approaches are developing with technology. Increasingly, scammers will use social media to draw people in,” Coles adds.

“Some videos will show luxury lifestyles, and encourage people to sign up to a WhatsApp group where they will apparently learn the secrets of investing success. Another horrible twist on this is using deepfakes of well-known people in the industry, including Peter Hargreaves, to get people to sign up to scam WhatsApp groups.”

One hallmark of a scam is an opaque charging structure. Interactive Investor’s low flat fee is the opposite: transparent, predictable and overseen by the FCA. Its 30‑year track record and award‑winning account range mean you can build a legitimate portfolio without wondering who’s really holding the cash.

How to avoid financial scams 

There are several warning signs to be aware of. If you receive an unsolicited phone call, text, email, or even a knock on your door, that’s cause for concern. 

If they are forcing you to make a quick decision due to limited availability or if you feel pressured, it’s also best to put the phone down and double check the legitimacy of what is being offered. 

If you ask for contact details and they decline, or if you can’t find corresponding ones online, that should also be a red flag. 

And finally, if you’re promised something that is too good to be true – it’s probably because it is. 

Legitimate investments will still be there after you put the phone down to double check everything you’re being told is true. 

“If in doubt, it’s always better to err on the side of caution, and assume something is a scam,” Coles says.

If criminals do get hold of your details, speed is everything. Link your bank and credit‑card accounts to Snoop and the app watches for unusual transactions, sudden bill hikes and duplicate direct debits 24/7.

Push notifications flag anything that looks odd, giving you time to freeze cards or query payments before the damage snowballs.

What to do if you’ve been a victim of a scam

If you have been the victim of a scam you can report it to the police on 101, and report it to Action Fraud as well. 

Additionally, get in touch with your bank. If you’ve shared card or account details they’ll be able to protect your account and send out any new cards if necessary. Consider also changing your passwords if you’ve shared them.