High net worth individuals are losing, on average, £13,000 to online shopping scams, investment and pension scams, and romance scams, and the higher the wealth, the bigger the loss!
High net worth individuals (HNWIs) in the UK – categorised as individuals with assets of £250,000 – are losing significant amounts of money to scammers, according to the Saltus Wealth Index, a summary of data collected by surveying 2,000 HNWIs.
Wealthy individuals targeted by scams
+ −Over 40% of the HNWIs surveyed by Saltus have been victims of financial crime at some point, with one in eight (16%) being targeted in the past six months. The most frequent types of scams were:
- Online shopping scams (24%) – where the victim pays for goods or services online that never materialise and (often) the vendor has disappeared, meaning little to no chance of recouping the loss.
- Investment scams (20%) – where the victim is convinced to invest their money into a ‘too good to be true’ opportunity. These scams also frequently involve cryptocurrency. The opportunity is not real, nor are the returns or the investment company, and the money is gone.
- Pension scams (15%) – where the victim is convinced to access or move their pension savings to a new scheme which is either unregulated or bogus.
- Romance scams (9%) – where the victim is approached (usually online) by someone with the intention of starting a ‘romantic’ relationship, but the scammers aren’t who they claim to be. Their only goal is to use emotional manipulation to convince the victim to transfer them money.
The average loss by all HNWI respondents who shared that they had been a victim of financial crime was just over £13,000, but for romance scam victims, the average was significantly higher at almost £16,500, with one in 50 losing over £50,000.
The data also revealed that, unfortunately, the higher the wealth of the victim, the more they lost overall, with the average loss for respondents with a net worth of over £3 million being £23,500 – seven times higher than those with a net worth of less than £500,000.
Authorised Push Payment (APP) Scams
+ −The types of scams experienced by the respondents in the survey are, unfortunately, not uncommon and affect people of all ages, incomes, and financial circumstances. Most involve an element of what is known as Authorised Push Payment (APP) fraud.
APP fraud is a type of cybercrime in which victims are tricked into sending instantaneous money to scammers via their bank account, through social engineering schemes, manipulation, and impersonation. These authorised frauds may also be linked to romance scams, where the victim is duped into paying money for travel costs or medical emergencies that do not exist, and investment scams, in which the victim is tricked into sending money for fake investments.
Because the victim believes the bank transfer they have been instructed to perform is for a legitimate reason, they willingly authorise the payment, immediately landing the funds in the scammers’ account. Often, the victim does not realise they have been duped straight away, and it is not until goods do not materialise, an investment makes no returns, or the romantic interest disappears, that they realise they have been conned and try to report the scam. At this point, the money has been moved on, often overseas, and proves difficult, if not impossible, to recover.
If you find yourself the victim of an APP scam, the first thing you should do is report it to your bank, the police and Action Fraud. Banks in the UK have a duty of care to provide safeguards and procedures to prevent fraud from happening in the first place, including security questions, monitoring accounts, and blocking suspicious transactions.
If your bank refuses to award compensation following an APP scam, and you believe they have not upheld their duties, you can have your case independently investigated by the Financial Ombudsman Service (FOS).
Financial Ombudsman Service (FOS)
+ −FOS is an independent, Government-endorsed body responsible for investigating and adjudicating disputes between financial institutions and consumers, both businesses and individuals.
In recent years, as scammers have become more sophisticated, FOS has dealt with an increasing number of cases involving the banks’ safeguards and processes, resulting in significant compensation awards.
7 steps to protect your money from APP scammers
+ −Each scam is unique, but there are ways you can try to safeguard your money, whether you’re making a big purchase, online dating, considering moving your pension, or investing. Make sure you’re aware of these tips, and if anything seems fishy, do not move any money:
- When considering investing, never allow someone else – even someone claiming to be a legitimate broker – to open a crypto wallet for you or to have access to your login details, passwords, or devices.
- Don’t be taken in by elaborate and glossy marketing for investment or pension schemes – genuine firms are unlikely to push themselves as aggressively as the scammers do.
- Don’t act too quickly – take time to do your research, whether that is on the investment you’re considering, the item you want to buy, or even the person you are talking to. Look at online reviews and check any websites and social media channels of the organisations or individuals involved. When things seem too good to be sure, they often are.
- Before investing or moving your pension, speak to an adviser regulated by the City watchdog, the Financial Conduct Authority (FCA) – spending a little money initially to save your finances in the long term could be a wise investment!
- Use the FCA’s Warning List to check if the investment firm you’re dealing with is on its radar as one to avoid, and double-check the firm’s contact details on the FCA register.
- Be open and honest with your family and friends; let them know if you’re online dating or considering investing money. This could help them spot any red flags or changes in your behaviour as well as be an invaluable and more sceptical ‘second pair of eyes.’
- Don’t mix dating and investing – a common cryptocurrency scam tactic is to befriend and form a ‘relationship’ with a victim via online dating apps or social media, also known as a romance scam. Don’t let someone you’ve never met tell you what to do with your money.
If you have been scammed, it’s natural to feel tricked, ashamed or embarrassed, but not reporting it will not get your money back. You are not alone, and there are organisations that can help you look into compensation options.
TLW Solicitors’ View
+ −Commenting on the Saltus report, Sarah Spruce, Legal Director and Head of the Scams and Fraud team at TLW Solicitors, said:
“Regardless of your net worth, becoming the victim of a scam can be devastating and leaves people feeling vulnerable and embarrassed. We see clients from all backgrounds who have been blindsided by sophisticated scams that seemed legitimate, even those who think that they’re financially savvy and super safe with their money.
If this is you or someone you know, do not be embarrassed or ashamed, speak to a member of my team today. We can discuss your options and, if we take on your case, raise the complaint with your bank or FOS on your behalf, as we have done successfully for many of our clients in a similar situation to yours.”
APP fraud and scam compensation specialists
+ −If you, a friend or a loved one has been the victim of a financial scammer, then please get in touch with our specialist team for a confidential, no-obligation discussion. We work on a no-win, no-fee basis, so you pay us nothing if your APP fraud refund claim is unsuccessful.
Call us on 0800 169 5925 or complete one of the forms below.
Time limits can apply, and so anyone wishing to bring a claim should do so without delay.
Minimum claim values apply.
Meet Our Team
Meet Sarah, who heads up our experienced Authorised Push Payment Fraud Claims team.
Sarah and her colleagues are on hand to help with your claim.
