Appendix 2: Types of Fraud and Scams
Sources: Action Fraud UK; Citizens Advice; WHICH; National Trading Standards; Scamwise; Financial Fraud Action UK; Police Scotland
Advance Fee Fraud
- This is when a payment is made to fraudsters who claim to be in a position of authority, such as a foreign government official, to transfer money or for a promise of employment, wealth or gifts.
- This is where people are being phoned up to see if they are European Citizens. It plays on people's fears and is advising them that they have to pay extra for this or that. It's a relatively small problem currently, but is worsening over time.
One Ring and Cut (Wangiri Scam)
- This involves a fraudster calling a mobile phone at random and then hanging up after one or two rings. After seeing the missed call an individual calls back but are connected to a premium-rate recorded message based overseas.
- The scam involves being informed of a non-existent lottery and in order to receive the prize victims must send some money or personal information in advance.
Counterfeit Cashiers Cheques
- Fake cheques are given as payment for goods/services over the actual value. The victim then refunds the purchaser with the excess payment prior to the cheque being discovered as fraudulent.
- This happens when a victim is befriended romantically and over a period of time is convinced to send money to their new love for a variety of emotive reasons.
- This is when fraud victims are targeted by criminals posing as recovery agents, claiming to be able to recover their lost money, in order to get personal details and additional money.
- Fraudsters send out a mass mailing to people who share the same surname. Each one is told there is cash from an inheritance that has been located in their name and in exchange for personal information or money, the agent can take forward their claim.
- Victims are tricked into paying for tablets which claim to cure disease and or dietary products which claim to enhance weight loss. These products as well as being ineffectual could have potential safety issues as they are often ordered through the internet from non-domestic sources who may not have the same screening of such drugs/products as in the UK
- Victims are tricked into paying upfront fees/rent for the rental of property which either does not exist or is not for rent. In some cases properties are rented to multiple victims at the same time.
Other Advance Fee Frauds
- This is when fraudsters contact victims and persuade them to pay an upfront fee for a service that does not exist. Common examples of this fraud include cold call offers to make PPI claims on a victim's behalf for a fee, or an offer of employment that requires a fee for security checks.
Lender Loan Fraud
- A situation when a victim receives a cold call offering them a loan that has been arranged for them for a fee. Fraudsters will ask victims to send money (usually via an electronic medium) but no loan will materialise.
Share sales or Boiler Room Fraud
- Boiler room fraud is a fraud where victims are cold-called by fake stockbrokers and encouraged/persuaded to buy shares or bonds in worthless, non-existent or near bankrupt companies.
Pyramid or Ponzi Schemes
- Pyramid schemes are scams in which investors are promised abnormally high profits on their money. These schemes encourage investors to recruit new members to increase earnings from a scheme which is unsustainable.
Prime Bank Guarantees
- This is an investment scheme where the victim is offered discounted bank guarantees with the promise of a high return when they have been resold. The victim is encouraged to send money to a foreign bank where it is eventually transferred to an off-shore account that is in the control of the fraudster.
Time Shares and Holiday Club Fraud
- Fraudsters will contact a victim at home, often by phone and tell them they have won a 'free' holiday. These holidays are not free and can involve fees for extras. Sometimes victims are also forced to attend a presentation on a holiday club.
Other Financial Investment
- This fraud consists of a range of investment opportunities to convince victims to part with their savings. The word "investment" is widely used in connection with a wide range of schemes offering income, interest or profit in return for a financial investment.
Online Shopping and Auctions
- This involves a product being advertised for sale through internet shopping and auction sites that either does not exist or doesn't match the original description. This also includes when a legitimate seller does not receive payment for goods sold online and is unable to contact the purchaser.
Consumer Phone Fraud
- This happens when victims are targeted through missed calls, text messages and ring tone scams. These contacts are to make unsuspecting victims respond via premium rate telephone calls and SMS messages.
Door to Door Sales and Bogus Tradesmen
- Bogus tradesmen, door-to-door sales or doorstep fraud involves fraudsters trying to scam victims after knocking at their door. Such frauds involve promoting goods or services that are either never delivered to you or are of a very poor quality.
Other Consumer Non Investment Fraud
- This fraud occurs when victims are shown, or test a product that is not received, false or stolen. An example of this fraud is when a car is purchased by a victim who finds out that it is actually stolen, or a victim who buys a laptop only to find out the bag is empty.
Computer Software Service Fraud
- A fraud which involves the victim being contacted and told that there is a problem with their computer and for a fee this can be fixed. No fix actually occurs.
- Ticket fraud occurs when a victim purchases a ticket in advance over the phone or internet, only to discover that the tickets are not valid or never received. This can occur for concerts, events, flights, etc.
- This is fraud committed against retailers. It is committed through refund fraud, label fraud or when goods are ordered with no intention of paying. It does not involve plastic card sales, cheques or purchases online.
- This occurs when fraudsters organise the fraudulent collection of money using names of genuine charities or fictional ones.
Fraudulent Applications for Grants from Charities or Lottery Fund Organisations
- This fraud occurs where charities have provided grants based on false information, or where they have received grant applications that contain false representations and so no grant was paid.
Banking and Credit Industry Fraud
- This is when fraud is committed against a bank or financial institution using a false identity, credit or debit cards, cloned cards, cheque books or online accounts.
Cheque, Plastic Card and Online Bank Accounts (not PSP)
- This fraud occurs when there is fraudulent use of a cheque, plastic card or online bank account. This does not include companies that deal with electronic money transfers.
Application Fraud (excluding Mortgages)
- This occurs when fraudsters open an account using a stolen identity or false information.
Mortgage Related Fraud
- This fraud covers a wide range of deceit, from simple overstatement of income to planned abuse by organised crime groups.
- This happens when fraudsters get victims to change a direct debit, standing order or bank transfer mandate. They do this by pretending to be an organisation a victim makes regular payments to e.g. a business supplier.
Dishonestly retaining a wrongful credit
- This fraud occurs when money is received wrongfully or in error, and the recipient decides to keep or spend the credit instead of alerting the most appropriate authority.
Insurance Related Fraud
- Insurance fraud is where policy holders obtain money or replacement goods through false insurance claims or obtain policies by submitting false details.
Insurance Broker Fraud
- This is where victims get insurance cover from a broker or fraudsters pretending to be brokers. When a claim is made or the policy checked, they discover that they are not insured, or the cover is not the same as they thought they paid for.
Telecom Industry Fraud (Misuse of Contracts)
- This is when contracts are obtained by fraudsters from service providers, using false details or stolen identities with no intention of paying.
Corporate Employee Fraud
- This is where employees or ex-employees obtain property or compensation through fraud. It also covers the misuse of corporate cards and expenses.
Corporate Procurement Fraud
- This occurs when excess goods are ordered using company funds and then sold on by the fraudsters. Or where goods of a lower quality are delivered to those paid for, with the offenders pocketing the difference.
Business Trading Fraud
- A person is guilty of an offence if they knowingly carry on business trading with the intention of defrauding creditors or for any other fraudulent purposes.
- False accounting fraud happens when company assets are overstated or liabilities are understated in order to make a business appear financially stronger than it really is.
Bankruptcy and Insolvency
- Fraud relating to bankruptcy and insolvency can involve companies fraudulently trading immediately before being declared insolvent, or phoenix companies.
Passport Application Fraud
- Passport fraud occurs where fraudsters obtain or try to obtain a United Kingdom passport by false representation to the HM Passport Office.
Department for Work and Pensions Fraud
- This fraud occurs when benefits given out by the Department for Work and Pensions are claimed fraudulently.
- This normally involves more than one perpetrator. The individuals pretend to be from a utility company and/or the Local Authority. They gain access to someone's property. One individual will keep the victim busy, while the other steals their money and/or jewellery, with the victim may only becoming aware of same sometime after they have left.
Familial Abuse/Trust Abuse
- This occurs where a member of family and/or friend could asked by the victim to perhaps shop for them and/or perhaps use the victim's bank card to withdraw funds. Goods could be bought for less than the amount charged and/or money retained by the friend/family member.
Fraudulent Applications for Grants from Government Organisations
- This is where Government funded Organisations have provided grants based on false representations or where they have received grant applications that contain false representations and so no grant was paid.
HM Revenue and Customs Fraud
- This fraud occurs when fraud is commitment against HM Revenue and Customs.
- This is where someone has done a google search to apply for a loan. Part of the application procedure involves the company asking an individual to prove they have the capacity to set up eg standing orders and/or buy an iTunes online. The voucher is purchased and nothing is heard of the company again who converts the vouchers into cash.
Pension Fraud by Pensioners (or their Estate)
- This is where the pension provider is defrauded by a pensioner or by the pensioner's estate following their death.
Pension Fraud committed on Pensioners
- This is where the pensioner is the victim of fraud on their pension.
Pension Liberation Fraud
- This is where a pensioner is persuaded to 'liberate' their pension early for a large cash sum. The payment is considerably smaller than they expected because of fees and taxes.
Other Regulatory Fraud
- This crime type is used to record fraud from regulators that is not covered elsewhere. Examples would include fraud against the Land Registry, Insider Dealing at the stock exchange, or the Gambling Commission.
Fraud by Failing to Disclose Information
- This fraud occurs when there is a failure to disclose information by an individual to another person when they have a legal duty to so. An example of this fraud could be when a solicitor fails to disclose information to one client to benefit another.
Abuse of Position of Trust
- This is when someone abuses their position of authority or trust against another person, for personal or financial gain, or to cause loss to another.
- A virus is a computer program that can replicate itself and spread from one computer to another by using code. It is usually sent over a network/internet or introduced to a computer on a disk drive or memory device. Malware/spyware can also collect information or data from infected devices and pass them on to another device.
Denial of Service Attack
- A denial of service attack (DoS attack) or distributed denial of service attack (DDoS attack) is an attempt to make a website or email address unavailable to its users. These types of attacks bring these networks down by flooding them with useless traffic.
Denial of Service Attack Extortion
- This occurs when a victim is blackmailed with a threat of a denial of service attack.
Hacking – Server
- Computer hacking is the unauthorised modification of any computer server. It is usually committed by persons illegally accessing the server, but it can be committed by persons with lawful access to the computer as well.
Hacking – Personal
- Computer hacking is the unauthorised modification of someone's personal computer. It is usually committed by persons illegally accessing the computer, but it can be committed by persons with lawful access to the computer as well.
Hacking - Social Media and E-mail
- This crime is the hacking of any form of email accounts and social media accounts, for example Twitter and Facebook.
Computer Hacking – PBX/Dial Through
- A private branch exchange (PBX) hack is a remote attack on telephone systems that contain features such as call forwarding, voicemail and divert.
- This occurs when a victim is blackmailed with a threat of computer hacking.
Other Fraud (not covered elsewhere)
- Other frauds are where false representation or obtaining services dishonestly have occurred that aren't covered in other crime types.
Trusted agent phone scams
- These cold call scams typically involve fraudsters deceiving people into believing they are speaking to member of bank staff or other trusted agency
Premium rate number scams
- Premium rate number scams try to snare people who are searching online for telephone numbers of government advice services. Here's the lowdown...
- The first quarter of any new year sees an increase in fraudulent tax emails, appearing to come from HMRC. Don't be fooled by these scam tax emails.
Door to door scams
- Can take many forms, but instead of relying on the anonymity of online communications, they simply knock on your door. While they can be investment and pension scammers as well, they can also try and scam in a more practical way –selling a product or service. EG a person claiming to be a builder who happened to notice some damage to your roof when they were passing. Fake charity collectors and salespeople are other examples.
- Text message based scam. Scammers will contact you claiming to be from your bank saying you need to update your personal details, or there is some kind of issue. The text might contain a link (like a phishing scam), or a phone number to call. The phone number is fake and, when you call, the fraudsters will attempt to get you to reveal your details.
- Similar to phishing, but instead of sending you an email directly, the scammers target the website you are visiting. You type in the correct website address, but you then get directed to a fake version, where you inadvertently put in your login details and secure information.
- Since the pension freedoms were introduced in 2015, retirees are able to access large sums of money from pension pots. An unfortunate side-effect has been this group is now being targeted by scammers because they can potentially access large amounts of cash. Pension scams will usually follow a similar path to investment scams, with contact normally being made by telephone.
- Generally a phone based scam, although you might be targeted in other ways, such as email or people coming round to your front door. Although investment scams vary, the principle remains the same. You are encouraged to hand over money to invest in a company or product, which in some cases doesn't exist. In other cases it could be that the investment does exist but involves a portfolio scam or blended exotic investment (eg Brazilian Rain Forest/tea trees) gives cashback or cashback in the guise of commission. In general these are long term investments where people are locked in for 5 years and although there might be warning signs after year 2, you can't get your money out.
Psychics and clairvoyants
- You may receive a letter from a psychic or clairvoyant offering to reveal something to you in exchange for money. Sometimes these scams are used to set you up for lottery scams by giving you lucky numbers. The letters may be sinister or threatening.
- You may be invited to invest in a business with high returns and low risk. You have to pay to join and you get rewards for recruiting other investors. You may get some small payments at first to persuade you to invest more but usually the investment is worthless or doesn't exist.
No hang-up phone scam
- The scammers ring posing as someone from a reputable organisation, then tell you to call the organisation (eg your bank) to verify what they're saying and give them your personal details. The scammer will pretend to hang up while you do this, but they'll keep the line open – you'll think you have got through to the organisation but you'll still be talking to one of the scammers. They can use fake dialling tones so you don't notice anything is wrong
- This type of fraud is increasing. Scammers sell non-existent holidays or holiday add-ons. They'll often encourage you to pay by direct bank transfer away from a main holiday booking site – perhaps by saying you'll get a better deal if you book that way. You might only realise you've been a victim when you arrive at your destination and find the booking doesn't exist
- Scammers may use automated systems to dial numbers very briefly, leaving a missed call on your phone. Calls are often from numbers starting 070 or 076. They are actually premium rate numbers and if you call back, you'll be charged a high rate for making the call. Scammers also send text messages to mobile phones that seem like they're from an ordinary individual trying to contact their friend. If you call or text them back you'll be charged a high rate
- You search online for a Government service such as passport renewal, driving licenses or European Health Insurance Cards. You click on the first website in the search results. It looks legitimate. In fact it's a copycat website and you end up paying more for a service that should have been free or much cheaper
Fake solicitors and legal services scams
- You have received a letter or email from a solicitors firm you do not use, or about a legal matter you are not aware of. The correspondence looks legitimate. They offer legal services in return for a fee or claim that legal action has been taken against you that you must pay to settle. Often the legal firms are fake, or a fake person claims to work at a legitimate firm.
Miracle health cures
- Miracle health cures or 'scientific breakthroughs' offer health products to cure a problem such as arthritis, diabetes, or cancer, or to help you lose weight. These are also known as "snake oil" remedies. The seller often promises a no-risk money-back guarantee or a free trial. There are often quotes from doctors and happy customers. These types of products and medicines are unlikely to do you much good, and might even harm you. Talk to your GP before you buy any of these products.
Telephone Preference Service Subscription
- This particular scam focusses on cold calling consumers who had previously signed up to the TPS to be told their subscription to the service was running out. The caller would then ask the victim to supply their credit or debit card details to renew their TPS subscription (a free service). In some cases the caller already had some of the victim's personal details (such as name, address and telephone number) which made the contact seem more plausible.
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