All fraud information on these pages comes from advice given by Action Fraud.
Payment fraud involves falsely creating or diverting payments.
It can include:
- Creating bogus
- Customer records
- Bank accounts to generate false payments
Intercepting cheques and Payable Orders and altering the payee details to try to cash them.
A pension liberation scam is when a fraudster will promise to release cash from your pension benefits before actual retirement. Pension liberation is usually offered through fake offshore companies that will say that they can use a “legal loophole” to release funds, when in fact there is no legal loophole. The pension liberator will take 20% to 30% out of your funds as a “management fee“, leaving the owner of the pension with the rest. Even if you do get your money you will be hit with 40% tax liability on the full fund, including the fee to the liberator, because fraudsters do not pay the tax to the HMRC.You should always we wary of any scheme that offers to unlock pension benefits, especially if you are under the state retirement age. Pension liberation should not be confused with 'pension unlocking'. This is a legitimate although potentially risky means for people aged 50 or more to take early retirement and release their pension benefits from an occupational or personal pension, as long as the legal requirements are met.
Phishing is when random emails are sent to an individual or business, pretending to be from a genuine company or bank, in an attempt to trick customers into disclosing their personal account information. If customers do disclose this information, it is in fact entered into a bogus website operated by fraudsters. The criminals have subsequently captured your personal information to use for fraudulent purposes. These phishing emails usually claim that it is necessary for customers to 'update' or 'verify' your customer account information, by clicking on a link from the email which takes you to the bogus website.
Postal Delivery Service
The Postal Delivery Service (PDS) chain email is a hoax. It warns about a postal scam that could charge you £315 if you phone the Premium rate number when you receive a card through the post claiming PDS have failed to deliver a package. The email mentions names such as the Royal Mail and Trading Standards in an attempt to look official. This chain email refers to a service that has not been in operation since 2005 and the Belize-based operating service Studio Telecom was fined £10,000 by PhonepayPlus. More information on the PDS hoax can be found on the ActionFraud website.
Premium rate phone line scams
Premium rate phone line scams involve fraud being committed against telephone companies. There are a number of different ways in which fraudsters use premium rate phone line scams, otherwise known as fixed line fraud. One way is card selling fraud. Card selling fraud involves fraudsters taking out a phone service and then selling members of the public the ability to make calls through it, then the fraudster fails to pay the bill. A further way in which phone line scams are committed involves the fraudster taking out a phone service but providing false details in their application. Fraudsters then leave a debt which is uncollectible, known as a bad debt.
Procurement fraud is any fraud relating to a company purchasing services, goods or commissioning construction projects from third party suppliers.
Fraud happens when there is:
- Cost/labour mischarging
- Defective pricing
- Defective parts
- Price fixing
- Bid rigging
- If the tender process has not been followed correctly
It can also include payment for goods or services that were not delivered, or if they are of substandard quality or have been substituted.
Property investor scams
Property investor fraudsters persuade victims to attend free presentations on how to make money from property and then charge them a fee to join. The companies appear to offer an attractive business model and for a joining fee they will allow you access to all of the company’s methods, secrets and opportunities to buy properties. The properties they have on offer have usually not been built yet so you should be wary of this. Once they receive your joining fee the fraudster will disappear and you will lose your money and not get the opportunity to but any properties.
Proxy servers allow fraudsters to reroute communications on the internet to make them appear to be from other countries or locations. Fraudsters will use this to help mask their identity and computer location to commit frauds online.
Public funding and grants fraud
Public funding and grant fraud occurs when businesses, individuals, organisations or criminal groups apply for public funding they are not entitled to. Fraudulent claims could be made to a number of public bodies that supply funding, such as Student Loans Company or the Lottery Commission.
Pyramid scheme fraud
A pyramid scheme is an illegal and unsustainable business that offers rewards for recruiting further "investors" into the scheme for a product that has no value. The scheme is usually disguised as a multi-level marketing investment with exciting slogans such as “get rich quick,” or “make millions without working.” The hallmark of the pyramid scheme is that no actual product is offered.You are initially required to pay a one-time fee to sign up to be part of the investment scheme. You will then be obligated to sign up other people whilst explaining the same process. Fraudsters rely on you to try and sell to family or friends because they are more likely to be more trusting. If you successfully sign up as many people as possible you are told you will be paid for their receipts, when in fact it is impossible to recruit the number of people required to pay off the previous layer of recruiters. Pyramid schemes do not work unless somebody loses. Those at the bottom of the pyramid are essentially defrauded by those on top of the chain. Your money is not invested in any product and because the schemes don't make any profit you’re very unlikely to recover any lost investment.
Racing tipster scams
Racing tipster scams happen when a victim is offered a guaranteed tip for a race in return for a small fee. You will usually receive this tip from a fraudster in the form of a letter.
Receipt fraud is usually committed by a company’s employees. This usually happens when cash and cheques are stolen, or when certain figures owed by customers are amended for financial gain.
Recruitment scams - or employment fraud - is when fraudsters claim to be an employer or a representative from a recruitment agency and hire someone for a job that doesn’t exist. Fraudsters use internet job sites to obtain CVs and personal details of members of the public who they then contact with a job offer. On occasion, fraudsters will ask the victim to complete a questionnaire or take part in a telephone interview before being told that the job is theirs. After telling the victim that they’ve been successful in their job application, fraudsters contact them to make supposedly necessary arrangements. Often the ‘job’ that the applicant has been offered is based abroad, so arrangements for visas, travel and accommodation are discussed. Victims are referred to an agency who, for a fee, can help with these arrangements. The fraudulent agency then try to obtain as much money as possible from the victim without making any of the arrangements the person has paid for. They may initially charge a deposit for accommodation, before charging a fee for visa administration for example. Some fraudsters will request that the applicant pays a fee in order to apply for the job. In other instances the victim’s bank details are obtained by employment fraudsters as they claim that the details will be used to pay the applicant’s salary. Money is then stolen from their bank account.
Spam also known as junk e-mail or unsolicited bulk e-mail is sent out to millions of people's email address in order to obtain personal information. Spam is very common, with most if not all individuals receiving spam email at some point in their internet-using lives. Fraudsters can collect your email addresses form a variety of sources such as chatrooms, websites, customer lists, newsgroups, and viruses which harvest users. The majority of the time your email service provider will filter spam out into a dedicated folder called “junk email”.
In November 2013 the National Crime Agency (NCA) issued a warning to notify the public of ongoing ‘mass spamming’ by fraudsters who are sending millions of spam emails to UK customers, claiming to be from banks and other financial institutions.
The e-mails include an attachment that claims to contain details about one of the following; a suspicious transaction, an invoice, a fax or a voicemail. Do not open any attachments - the attached file is in fact a malware.
If the attachment is opened, it may lead to “Cryptolocker” being installed on your computer. Cryptolocker works by encrypting the user’s files on the infected machine and the local network it is connected to. Fraudsters then demand payment of approximately £500 to release the files. Once the files are encrypted, there is no way to decrypt them without paying the ransom.
If you should encounter this malware, please report it to: www.actionfraud.police.uk
Tax credit fraud
Tax credit fraud is a criminal offence that occurs when someone lies to obtain tax credits they are not entitled to or deliberately fails to report a change in their personal circumstances. This means that anyone who has committed tax credit fraud can be prosecuted and, if convicted, receive a criminal record. Tax credit fraud can be both individuals and organised fraudsters. If you are told you are claiming tax credits when you are not you could be a victim of identity theft whereby fraudsters are claiming tax credits in your name.
Consequences of tax credit fraud if you are caught:
- Paying the stolen money back
- Criminal record
- Termination or reduction of benefit
- Loss of home or possessions and Prison sentence
Tax fraud is when a person, organisation or employer deliberately avoids or wrongly claims a tax repayment by acting dishonestly to the HM Revenue & Customs (HMRC).
Examples of tax fraud are:
- Businesses that do not declare all of their profits.
- Businesses that do not register for VAT.
- Individuals not telling HMRC about their income.
- Individuals smuggling goods such as alcohol and tobacco into the UK in order to avoid VAT.
Tax fraud affects everyone because it means there is less to spend on the National Health Service, schools, pensions and many other important services. The government can prosecute people who commit tax fraud, as well as anyone who helps them to commit the fraud.