The 21st century saw vast advancements in technology which disrupted and, in some cases, dismantled deep-rooted industries. The financial sector was reformed by the rise of FinTech solutions which introduced modernised and automated financial services, such as faster payments, credit platforms and online banking, available at our fingertips.
Although, on one hand, the rise of these innovations paved the way to a financial revolution, on the other hand they introduced a higher risk of fraud - a deceptive action typically intended to result in an unlawful financial or personal gain. Fraud is costing the UK around £190bn per year, with around 39% of fraud being reported by individuals.
The consequences of fraud to individuals may be severe and difficult to reverse.
Short-term repercussions can leave you in a vulnerable financial position in the several weeks to months following the fraud detection. For example, if criminals have gained access to your bank account or debit and credit cards, you may be at risk of losing money or racking up credit card debt, which may result in difficulty to cover your basic living costs.
Fraudulent activity can also affect your credit score negatively. Removing fraudulent records from your credit file is possible but they may temporarily prevent you from materialising financial goals such as being approved for a mortgage.
Long-term consequences may affect you for several months to years following the detection of fraud. For example, the fraudsters may use your personal and financial details to inflict lasting damage such as committing large-scale financial scams or other crimes.
Although it is likely that the victim of fraud will be able to recover financial loss or clear their criminal or credit record, this may not always be a straightforward process and can cause emotional and financial suffering.
Fraudsters are going to greater lengths to create more sophisticated scams, and recognising whether you are being tricked can sometimes be difficult. However, there are some tell-tale signs you can watch out for to help you identify fraud attempts at the early stages.
Signs you are being targeted by fraudsters:
If you suspect that you have been a victim of fraud or identity theft you should take action to report the incident as soon as possible.
Informing your bank or lending institution of the fraudulent activity is essential to ensure that any jeopardised accounts or cards can be frozen immediately to prevent further damage and to open an investigation. You should discuss with the institution what your options are for recovering any money lost in the fraudulent activity.
You should submit a report of the offense to Action Fraud, a service run by the City of London Police who work alongside the National Fraud Intelligence Bureau to investigate cases of fraud. Action Fraud’s reporting tool is a straightforward online feature with advisers available 24/7 to help guide you through the process.
If any of your documentation, such as your driver’s license or passport, is missing you should notify the appropriate institution without delay. If you suspect that your post may have been stolen or redirected, get in touch with Royal Mail to open an investigation.
You should obtain and review your credit report. You can request your credit history from any of the three Credit Reference Agencies (CRAs) in the UK, Experian, TransUnion and Equifax. Check for any credit applications that you do not recall making yourself and contact the lender immediately.
If you have been a victim of fraud, you may wish to register for the UK’s fraud prevention service - CIFAS. CIFAS can place a protective registration notice on your credit file, which will inform lenders that you have been a victim of fraud in the past so they can take more substantial security measures before approving credit applications made in your name.
Victim Support, an independent charity, can offer free, confidential information, advice and support to victims of crime or traumatic events. Victim Support are contactable 24 hours on their online and telephone helplines. You can also receive help locally at your nearest Victim Support office.
The growing pressure on FinTech institutions to provide higher security levels to customers has resulted in developments in data safeguarding, and although your data is stored safely, often the biggest breach of security may come from your habits. Thankfully there are simple steps you can take to reduce the risk of becoming a victim of fraud.
Question all phone calls and emails even if they appear to be genuine and remember that reputable financial institutions will never ask you to give out private information such as your PIN number. Never give out your name, address, bank details, email or phone number over the phone or in writing to unsolicited companies or individuals. Take extra care when disposing of receipts containing your card details and post with your name and address on it.
Make arrangements to protect your devices from malware or hacker infiltration with an up-to-date firewall and anti-virus defence system. When browsing the internet make sure to only visit credible websites.
Always follow the organisation’s security guidelines to safeguard your online accounts. Set a strong password and enable a two-factor authentication process where possible. Never tell anyone or write down your passwords and use a different password for all accounts.
Check all your correspondence thoroughly and be vigilant for any invoices or financial institutions that you don’t recognise. Take immediate action if you don’t remember carrying out a transaction or opening an account with the company as your identity may have been stolen.
Fraudsters may target victims of fraud and pretend to be a law enforcement officer or an authorised lawyer dealing with the recovery of money lost to fraud. Remember that you will never be asked to give out personal details during a genuine conversation with a fraud recovery specialist.
If you feel that something isn’t quite right, it’s always better to double check it before you chance it. Never feel pressured to give out security information over the phone or by email, and take extra care to protect yourself from common fraud tactics.
At Polar Credit, we keep all account data secure with advanced anti-virus software and firewalls, and we will never pass on your details to unauthorised third parties so you can be sure that your personal information is safe with us.