Five scams we all fall for

At least £3.5bn is lost to fraud each and every year. We look at the most common scams - and how to protect yourself from them.

Whenever I check my email inbox, my heart sinks a little. There will always be loads of emails waiting for me, but the vast majority are junk. They are either spam, trying to flog me something. Or they are the more sinister form of email, a scam, trying to part me from my hard earned cash.

My favourite one recently came from a chap claiming to be the first African in space, offering to split the proceeds from some diamonds with me.

However, plenty of scams are more subtle and sophisticated, and catch people out every single day.

Fighting back

Action Fraud is the UK’s first national fraud reporting centre, and was set up by the National Fraud Authority as a central point of information for anyone to find out about the various forms of fraud that are prevalent today, as well as offering a 24 hour online fraud reporting service.

And since the centre launched at the start of 2010, it has received 15,000 web reports and calls from Brits about various fraudulent schemes. Action Fraud reckons at least £3.5bn each year is lost by individuals due to fraud, and that the figure is likely far higher as many victims don’t actually report it.

The centre has put together the top five most common frauds in the UK today. Let's take a look at them, how they work, and how to protect yourself.

#5 Share sale fraud

Also known as boiler room fraud, this is where phony stockbrokers (usually based overseas) cold call you and try to pressure you into buying shares which they say will offer high returns. It should come as no surprise that in reality these shares either don't exist or are completely worthless.

The thing to look out for here is that the fraudsters will try to make the deal sound as credible and above board as they can. They may offer free research reports, share certificates, and all sorts of official seeming documentation.

Alarm bells should be ringing whenever you are called out of the blue offering you a brilliant investment opportunity, particularly as with share sale fraud the crooks will often tell you to keep your investment secret in order to maximise your return – utter codswallop.

#4 Non-investment frauds

Examples of this form of fraud include internet dialler and miracle health scams.

Internet dialler scams are when your computer's settings are changed so that your internet connection is re-routed via an expensive phone line. There are all sorts of ways that you can fall victim to this type of fraud, from opening a spam email, to downloading software from a pay-per-view site.

Miracle health scams on the other hand, as the name suggests, are the peddling of bogus pharmaceutical products which the scammers claim will fix certain ailments, or simply cause you to lose weight. These products have rarely been properly tested, and the scam will include false testimonials and worthless 'money back' guarantees.

#3 Romance and dating frauds

These frauds tend to involve you meeting the person of your dreams online, but it turns out they aren't who they say they are. Once they've earned your trust, they'll then try to get money out of you, for all sorts of emotive reasons.

This is one of the UK's fastest growing scams. To find out more on how the scammers reel you in and rob you, have a read of When falling in love can be costly

#2 Advance fee frauds

As the name suggests, this is when a fraudster tries to get you to pay upfront for goods or services that never actually materialise.

There are absolutely loads of different scams that work in this fashion, from career opportunity scams, where you are promised help to launch you into your dream career so long as you pay a 'consultation fee', to inheritance fraud, where you are notified by a 'solicitor' that a rich distant relative has died, with the proposition to split the inheritance to prevent the Government from getting hold of it, again requiring you to pay all sorts of mythical fees.

As soon as you see that you'll need to pay money up front, you should always be on your guard.

#1 Online shopping and auction fraud

This is the most common form of fraud, and takes advantage of the anonymity that the internet provides.

I know of friends that have bought computer consoles on auction sites, only to discover there is no console, costing them hundreds of pounds. Buyers may also end up with items significantly different, or inferior, to those advertised. But it's not just buyers who can be caught out by this – sellers may also send the item they have sold to the winning bidder, only for the money to never arrive.

The reason this type of fraud is so dangerous is that not only do you miss out on the item or money that you are expecting, but the details that you have shared with the other person in the transaction may then be used for identity theft.

How to protect yourself

Action Fraud reckons there are a number of simple steps that you should follow to ensure you do not fall victim to fraudsters.

• If it sounds too good to be true, then chances are it is. Don't be tempted into a deal that seems a little too perfect

• You can't win a lottery if you haven't entered it. So unless you remember entering it, chances are it's dodgy.

• Don't be afraid to ask questions. If they have nothing to hide then they will not be pushy or elusive.

• Be very wary about giving your personal details to strangers, or having to hand over money up front.

• Always check the real company's details against the details you have been given. If you have any doubts, call them direct.

And finally, if you have been the victim of fraud, it's really important to come forward and share your experiences with Action Fraud and any other authorities that may be able to help. Not only will this give you the best chance of catching the fraudsters who duped you, but the information you provide may also help other people from falling victim to them.

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