Financial scams are more prevalent than ever, and scammers are finding evermore ingenious ways to part you or your loved ones from your money. The cost-of-living crisis has provided fraudsters with yet another way to try and swindle you.

And banks, which are now bound by a code of conduct for victims of scams, are becoming more unreliable than ever when it comes to handling those cases, according to an investigation by consumer group Which?.

While in many cases banks are now obliged to reimburse you for loss of money thanks to fraudsters, the process is by no means easy, and it can take a lot of time to recover stolen funds.

It’s therefore essential to know how to protect yourself in the first place, and to recognise some of the latest ways in which they try to fool us.

  1. Cost-of-living crisis scammers

This is a new type of scam which will often come through a text message, email or phone call. One of the biggest tools scammers have, is to weaponise anything that is being whipped up as something to be worried about in the media.

At the moment the scammers’ zeitgeist is the cost-of-living crisis. With Chancellor Rishi Sunak promising thousands more in support for vulnerable households, scammers will no doubt be trying to get in touch with people to steal their bank account details while purporting to be from the Government, your local council, bank, or any other institutions.

But the truth is that these cost-of-living payments are being made automatically, and in many cases you don’t need to make contact with any authority. Certainly, none will be in direct contact with you about it, so just ignore any supposed outreach!

For the recent £150 energy relief payments, if you haven’t had it yet, try giving your local council a ring, or look on their website for new information.

  1. Advance fee fraud

Another recent rising scam, which Lloyds Bank has warned it has seen a 90% rise in instances of, is advance fee fraud.

This is again likely coloured by scammer references to cost-of-living crisis help, or at least easy credit in the face of rising bills.

Advance fee fraud leads people to enter their contact details on websites which appear legitimate when looking to take out a loan or a credit card. The website will then ask for an ‘advance’ payment – which you will never see again.

Liz Ziegler, director of fraud and financial crime at Lloyds Bank, comments: “Organised crime gangs will ruthlessly exploit any change in consumer behaviour. We saw that during the pandemic with the surge in purchase scams as certain goods became scarce and more people shopped online.

“The important thing to remember is that a genuine loan company will never ask for an upfront payment before releasing the funds. If you’re concerned in any way about your finances there are lots of organisations that can help, and it always makes sense to speak to your bank first.”

Key here to spotting the signs of a scam is strange looking URLs in your internet browser, spelling mistakes or poor-quality logos on websites. Unfortunately, these scammers do often just mimic the official websites of normal financial firms, so being highly vigilant if you’re looking to take on any new debt is essential.

  1. Bank account bait-and-switch

Another rising bank scam, reported by many of the major banks, is a so-called ‘bait-and-switch’ scam.

Instead of trying to directly swindle you, the scammer will get in touch pretending to be from your bank to say your account or other financial details have been compromised. They will encourage you to move your funds into a family member’s or friend’s account ‘for safe keeping.’

Your money is safe at this point but the next bit of the scam – the ‘switch’ – will see the scammer get back in touch to say your new, safe, account is ready for you. At this point they get you to move funds and if successful, will have control of your money.

The really important thing to remember with this one is that a bank will never get in touch with you in this way. If a bank does contact you, it will be through official channels such as your app or by letter.

The first thing to do if you do have someone contact you is to cease the exchange politely then search out the correct details for your provider and contact them directly to confirm what the situation might be.