Beware of Credit Crunch Scams and Fraudsters

As the effect of the Credit Crunch continues to tighten its grip on the nation more and more people will become venerable to scams and fraudsters in their effort to ?get rich quick?. There have already been reports from the government of a massive increase in credit card fraud and ID theft as criminal groups begin to take advantage of the weakened economy. It is now even more important to remain vigilant against such crimes and to also be aware that many scams are very elaborate and convincing, it is vital that you never exchange sensitive information with anyone unless you are certain that they are genuine.

Your bank will never ever ask you for details of your password or any other type of information which would give them access to your funds. Criminal gangs are very sophisticated in the way they operate using tactics such as phishing emails to gather your sensitive data, a phishing email is an email which looks like a genuine communication from your bank or even possibly a reputable high street name, they will try and trick you into parting with passwords and credit card details etc.

If in doubt call your bank to confirm and report the email immediately and delete it of your PC, do not click on any of the links and never ever open any attachments.

 Below is a list of the most common scams being used today, if you know of any more please let us know and we will post details on this page and my blog:


How do they work?
Consumers are approached while on holiday or at home in the UK. The promise of a free holiday is used to lure them to a presentation where they are pressured into signing up to a holiday club offering great value holidays all over the world in top-class accommodation.

In reality dates or destinations are not guaranteed and holidays are often not available when and where wanted. Victims later find out that the ‘free’ holiday isn’t free, as they must pay for flights and other add-ons and go somewhere they don’t want to go at a time that doesn’t suit.

  • Yearly cost to UK public- £1.17bn.
  •  Number of victims – 400,000.
  •  Average loss per victim – £3,030.
  •  Victim profile – A high 78% are aged between 35 and 64.




How do they work?
Consumers are contacted by letter, phone or e-mail and offered a chance to invest in shares, fine wine, gemstones, art or other ‘rare’ high-value items. The promise is that these will rocket in value. But what is offered is often over-priced, very high risk and difficult to sell on.

? Yearly cost to UK public- £490m.
? Number of victims – 90,000.
? Average loss per victim – £5,660.
? Victim profile ? Three quarters are men and more than a third are aged over 65.


How do they work?
Consumers, often friends or relatives, are asked to pay to become a member and are promised large commission earnings if they recruit others to the scheme. If enough new members join, the pyramid will grow, possibly enabling some members to make money. But, in order for every member to make money, there would need to be an endless supply of newcomers.

? Yearly cost to UK public- £420m.
? Number of victims – 480,000.
? Average loss per victim – £930.
? Victim profile ? Nearly three-quarters of victims are aged between 35 and 64.


How do they work?
Consumers are contacted by someone saying they need help transferring money overseas, usually millions of dollars. Writers, who often claim to be a relative of a deposed or dead politician, say they needs to transfer this cash to a bank in their country, and that if the recipients lets them use their bank account they can keep a big slice for themselves. Victim supplies bank details which are used to plunder their account.

? Yearly cost to UK public- £340m.
? Number of victims – 70,000.
? Average loss per victim – £5,000.
? Victim profile ? Mainly men, many of whom are middle-class.




How do they work?
Consumers receive a letter, phone call or e-mail telling them they have won a major cash prize in an overseas lottery. They will often be told to telephone a sales agent who will ask the victim to send money to cover adminstration, customs and taxes. The winnings do not exist and are never received.

? Yearly cost to UK public- £260m.
? Number of victims – 140,000.
? Average loss per victim – £1,900.
? Victim profile ? Slightly more men than women believe it is possible to win a prize in a lottery without ever buying a ticket.


How do they work?
Consumers reply to an advert offering fast loans regardless of credit history. Targets are told their loan has been agreed but before they can have the money they must pay a fee to cover insurance on the loan. After the fee is paid the victim never hears from the company again.

? Yearly cost to UK public- £190m.
? Number of victims – 110,000.
? Average loss per victim – £1,800.
? Victim profile ? More women than men. Most are short of money, but very few report the crime.


How do they work?
Consumers attend a free presentation about making money from property investment. They are persuaded to hand over money to sign up to a seminar or course promising to teach them how to make money dealing in property. Schemes may offer the opportunity to buy properties that have yet to be built at a discount. Victims lose their substantial joining fees and end up with no property. A variation is a buy-to-let scam where companies offer to source, renovate and manage properties, claiming good returns from rental income. In practice, the properties are near-derelict and the tenants non-existent.

? Yearly cost to UK public- £160m.
? Number of victims – 40,000.
? Average loss per victim – £4,200.
? Victim profile ? A high 76% of victims are middle-class men aged between 35 and 64.

Useful links