5 ways to protect yourself from financial crime in a cashless era

According to the NFIB Fraud and Cyber Crime Dashboard, reports of online shopping fraud in the UK jumped from 5,900 …

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Man sat at laptop computer using credit card to pay online using mobile phone

Image source: Getty Images.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

According to the NFIB Fraud and Cyber Crime Dashboard, reports of online shopping fraud in the UK jumped from 5,900 cases in 2019 to 89,800 reported cases in 2020. All types of financial crime are exploding – but how can you protect yourself?

From Instagram scams to charging people for COVID-19 vaccines or vitamins, or even claiming to be from the NHS Test and Trace, criminals are inventive. In ‘the new normal’, everyone and everything is online – including the criminals.

Enter your details into a website, then a few days later your new gadget or groceries arrive at your door. Put your details into an investing app, save for your future without leaving home. What could be more convenient? Unfortunately, criminals feel the same way. Here are five ways to protect yourself from financial crime.

1. Protect yourself online

While hacking is less common than fraud or other social engineering tricks, online safety is still critical. It’s nothing new; the basic principles of cybersecurity haven’t changed for years. Follow these tips to protect yourself online:

  • don’t carry out financial or private transactions on a public internet connection;
  • use strong passwords for all of your accounts;
  • keep your software, operating systems, antivirus and firewall up to date;
  • don’t install any program you didn’t actively seek out;
  • don’t click links in emails – go to the company website instead;
  • before entering details into an online form, check that there’s a locked padlock in the address bar on your browser;
  • consider whether you’d give your personal details to a stranger on the street in a similar situation;
  • before buying online, check the customer feedback. Very similar or very negative reviews are a red flag; and
  • pay with a credit or debit card, or even a prepaid credit or debit card.

2. Protect your paperwork

If you want to dispose of paperwork containing your personal or financial information, don’t just throw it in the bin. Criminals can use the information on your bank statements and other paperwork to steal your identity – and your money. Protect yourself by shredding sensitive paperwork before you throw it out.

It’s important to check if you’re a victim of identity theft. Check your bank statements and credit records regularly. Do you recognise all financial transactions in your bank accounts? If not, you could already be the victim of a financial crime or identity theft. 

3. Watch out for scams

Vishing, smishing, phishing, bogus bookings, advance fee fraud, premium phone scams, investment fraud, pension scams, identity theft, credit and debit card fraud…the list goes on. But no matter the scam, they have some things in common.

You’ve dealt with legitimate companies before. They’re predictable. On the other hand, scams come out of the blue, often with offers too good to be true.

Your bank knows your name, and they’ll never ask for your PIN over the phone. The NHS doesn’t need your credit card number for Track & Trace. You don’t need to book a COVID vaccine on a premium number. A legitimate company will never pressure you to sign their form in the next two minutes. And legitimate lotteries don’t ask for £1,000 up-front to release your winnings.

If something seems ‘off’, listen to your gut and move on.

4. Protect your bank cards

Criminals aren’t only in cyberspace – the real world still has risks, even without using cash. Criminals can fit special gadgets over the card slot on point-of-sale terminals and ATMs. The gadgets are difficult to spot and could steal your card details, or even take money straight from your card. It’s even easier for criminals to steal details from contactless cards.

To protect yourself, look for anything strange attached to card machines before using them. If you have contactless cards, protect yourself by keeping your contactless cards in an RFID-shielded wallet – or wrapped in tin foil!

5. Learn to protect yourself

You are your own primary defence against most financial crime. While hackers are a threat, most scammers are con artists: they win by manipulating people, so be on guard. Educate yourself about avoiding online scams, always stop and think, and report anything that doesn’t seem quite right.

Take Five is a national awareness campaign that provides simple advice to protect yourself against financial crime. It urges you to stop and think: is a request for personal or financial information genuine? Does what you’re being told really make sense?

If it’s already too late…

Prevention is better than cure. That definitely applies to protecting yourself from financial crime. However, if it’s too late and you’re the victim of a financial crime, report it!

Action Fraud has advice for reporting fraud and cybercrime. Your bank may also be able to help. Even if you can’t get all of your money back, reporting the crime might help protect the next target.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

More on Personal Finance

Note paper with question mark on orange background
Personal Finance

Should you invest your ISA in a model portfolio?

Which model ISA portfolios offer both high performance and low fees? Hargreaves Lansdown, Interactive Investor and AJ Bell go under…

Read more »

Economic Uncertainty Ahead Sign With Stormy Background
Personal Finance

Is it time to exit emerging markets investments?

Investors may well be sitting on losses from emerging markets funds. Is it worth keeping the faith for a sustained…

Read more »

Personal Finance

Share trading? Three shares with turnaround potential

Share trading has been difficult in 2022, but which companies have turnaround potential? Jo Groves takes a closer look at…

Read more »

Man using credit card and smartphone for purchasing goods online.
Personal Finance

Revealed! Why Gen Z may be the savviest generation when it comes to credit cards

New research reveals that Gen Z may be the most astute when it comes to credit cards. But why? And…

Read more »

Environmental technology concept.
Personal Finance

The 10 best-performing sectors for ISA investors

The best-performing sectors over the past year invested in real assets such as infrastructure, but is this trend set to…

Read more »

Road sign warning of a risk ahead
Personal Finance

Recession risk ‘on the rise’: is it time for investors to worry?

A major global bank has suggested the risk of a recession in the UK is 'on the rise'. So, should…

Read more »

pensive bearded business man sitting on chair looking out of the window
Personal Finance

1 in 4 cutting back on investments amid cost of living crisis

New research shows one in four investors have cut back on their investing contributions to cope with the rising cost…

Read more »

Image of person checking their shares portfolio on mobile phone and computer
Personal Finance

The 10 most popular stocks among UK investors so far this year

As the new tax year kicks off, here's a look at some of the most popular stocks among UK investors…

Read more »