Scammers are becoming more sophisticated in conning victims out of large sums of money, fraud prevention service CIfas has warned after reporting that fraud involving the personal data of victims accounted for more than 60 per cent of cases last year.
Stolen identities have long been used to apply for credit cards, loans, mobile phones and other contracts, goods or services. But that information is increasingly being used to gain access to savings and investments, said Cifas.
An attempt last week to defraud one Scottish investor of £15,000 was thwarted only by his financial consultant. Andrew Macintyre, of Alan Steel Asset Management, said it began when he received an e-mail from the client requesting a same-day transfer of £15,000 from his investment account to his bank.
“The e-mail was a reply to a previous message and it was from the correct e-mail address, so I didn’t suspect anything at that point,” said Macintyre.
“The request seemed legitimate and came with the client’s bank account details. Even the signature was a match, so it was very sophisticated.”
It was Macintyre’s close relationship with the client that eventually triggered his suspicion. “The request didn’t fit with his plans or circumstances, and he had recently been enquiring about investing more money in Isas,” said Macintyre. “The client is not short of money, so it was strange that he requested a same-day withdrawal.”
With the intended victim out of the country at the time Macintyre contacted the client’s wife, who knew nothing of the withdrawal request. When the client was finally reached he was astonished to discover his identity had been used by fraudsters to access his e-mails and open a new bank account.
The transfer was stopped and the bank and investment companies in question were alerted. But other victims will be less fortunate, said Macintyre. “The request wasn’t unusual, so if I hadn’t known the client so well I wouldn’t have been suspicious. But fraudsters seem increasingly aware that investment providers can be an easy target.”
The latest Fraudscape report from Cifas described the misuse and abuse of personal data as “the most severe challenge to organisations and individuals”. There were almost 130,000 identity-related crimes last year, it said, with many more going unreported.
The growing focus on investment accounts represents merely the latest phase in identity fraud-based crimes, said Richard Hurley, communications manager at Cifas.
“There is always an endgame, so any account that could enable someone to get their hands on a large amount of money will be a target. While credit cards are traditionally a target, other, potentially more lucrative accounts will be in the firing line eventually,” said Hurley.
Evidence suggests fraud gangs are gaining access to sensitive individual data by approaching finance sector workers they believe may be vulnerable to threats or other forms of coercion.
“It seems that people who work in large financial groups but have money problems are susceptible to attempts to procure certain data, such as details of clients with investment accounts maturing,” said Hurley.
The best form of protection is to be vigilant with personal information. That includes using different passwords for different accounts, as millions of eBay users were told last month after the auction site found that a database including passwords, contact information and personal details had been hacked.
Pensioners losing 30% of income
PENSIONERS are losing 30 per cent of their income to tax each year, with income tax and VAT taking the biggest bites out of budgets.
The average retired household forks out £6,400 of its £21,300 annual gross income on tax, according to research by Prudential, amounting to £46.5 billion a year in total taxes paid.
Income tax and VAT are the biggest bills, each soaking up 8 per cent of retired households’ incomes each year, with council tax taking another 4 per cent.
VAT isn’t the only indirect tax having an impact. Vehicle excise duty and taxes on petrol, tobacco and alcohol combined take 10 per cent from retirees, with pensioners on the lowest incomes likely to be losing the highest proportion of their incomes on tax.
Stan Russell, retirement income expert at Prudential, said: “Retiring from work doesn’t mean retiring from paying tax. Whether you are liable for income tax or VAT on purchases, the contributions you make to the Exchequer continue throughout your retirement.”