The synergy of Brexit and the COVID-19 pandemic has brought significant instability and confusion in the operating environment of the business in the United Kingdom. This confusion and instability has encouraged scammers and fraudsters to attack companies and taxpayers to steal sensitive information, in accordance with the National Cyber Security Center. In the last 12 months, reports of online fraud have increased 15 fold.
Therefore, companies and business owners need to remain alert against such potential frauds and safeguard their assets. We discuss some of the common methods adopted by criminals and related safeguards necessary to remain protected from loss.
Emails perpetrating to be from HMRC
There is an increasing trend of fraud by phone calls, messages, and emails where people claiming to represent HMRC. These emails and messages are professional making it difficult to recognise a scam.
Normally, it has been noted the trend of fake calls and messages increases at the time of filing self assessment tax returns. Taking advantage of the COVID-19 pandemic, scammers prey on the mind of those financially affected, offering tax reliefs that that may have been announced by the government. Furthermore, fake emails have been designed with an invitation to apply for Self Employment Income Support Scheme – SEISS. These emails have proved to be more harmful as there is a professional outlook of write-up and used themes.
HMRC has warned if taxpayers receive any messages/calls/emails asking for personal information for the purpose of a tax refund, it is most likely to be a scam leading to serious financial repercussions.
There can be some signs of an email being fake. For instance, grammatical errors, spelling mistakes, informal tone of the message and asking for contact details via social media.
Don’t click on a link
Most of the scams invite you to click on a link or download an attachment. When you click on a link, it redirects you to a phishing website; these websites collect sensitive information that can be exploited or expose you to malicious software.
Imports and exports red tape
In the UK, several attempts have been identified that attempt to clone gov.uk websites. Most attempts lie in the area of imports and exports. Furthermore, there is an increase in the regulatory compliance after Brexit which may create opportunities for scammers.
Pension fraud is a favorite areas of scammers. According to figures from Action Fraud, people have lost £1.8 million in pension fraud between January and March 2021. Frauds under pension schemes are conducted by offering the release of money from a pension and attractive investment opportunities. They have been known to offer withdrawal of pension money for under 55s that is not permitted practice under the pension freedom rules.
Pension fraud not only has a devastating financial impact on individuals in terms of loss of money, but it can also have a severe impact on the emotional and mental wellbeing of an individual.
How to protect pension funds
One of the most significant sources of the scam lies in cold calling including emails, and text messages. These cold callers offer free pension reviews or professional sounding and attractive looking offers which are, of course, fake.
In 2019 a ban was introduced on cold calling and all other communication to sell the products or services, but the problem remains.
Pension savers must remain alert and carry out checks of the consulting firm before finalising any deals with them. This can be done with the Financial Conducting Authority – FCA. Dealing with an FCA regulated firm gives you access to Financial Services Compensation Scheme – FSCS. This scheme holds professional firms responsible in case of professional negligence and provides financial protection to pension savers.
So, pension savers should never be coerced into to a pension scheme that seems “too good to be true”. Another psychological impact of these schemes is that they increase pressure by inserting artificial deadlines for the scheme.
If you have any doubts about any communication received, please do get in touch with a member of our team on 0121 271 0336 or email at email@example.com