Victims Lose Billions Each Year

Research published by the Office of Fair Trading (OFT) has found that some knowledge of investments can make people more vulnerable to scams.

The research that has been conducted has found that people who find themselves victims of scams more often than not have a better than average background knowledge of things like lotteries and financial investing.

The OFT is warning that 10% to 20% of the population are particularly vulnerable to such scams.

The report says that: “Compared to non-victims, scam victims report being less able to regulate and resist emotions associated with scam offers. They seem to be unduly open to persuasion, or perhaps unduly indiscriminating about who they allow to persuade them.”

The report was published as part of the OFTs continued campaign that aims to prevent scams. The report suggests that around 3.2 million people are the victims of fraudulent scams, losing around £3.5 billion each year in total.

Gullibility May Be The Key

The types of frauds that the OFT has highlighted in its research include scams from the ‘Nigerian’ or advance free frauds, to bogus lotteries, fake clairvoyants and health cures, bogus investments and crooked racing tipsters.

Fraudsters usually pretend to be a legitimate business and lure their victims with offers of big rewards .

The OFT staff at Exeter University’s psychology department has carried out four independent pieced of research, collectively entitled “The psychology of scams: provoking and committing errors of judgement”.

The results of the research showed that those that are more gullible tend to fall for such schemes more than most, but it also found several other, more surprising things as well.

They found that those who generally play legitimate lotteries or already have some knowledge in investments are more likely than an average person to become the victim or a scam.

Knowledge Can Have A Price

This is because people who put effort into analysing the content of the scam are more likely to fall for them than those who ignore them straight off.

The researchers also found that victims also generally hid their involvement in scams from their family and friends, likely because they want to avoid being told that they are foolish.

The OFT warns that the stereotype that to fall for a scam you must be gullible and foolish needs to be removed. It says that most people who fall victim are simply vulnerable to a “persuasive approach” as scams are usually marketed as legitimate offers.

Some people even willingly take part knowing that it is most likely a scam with the view that it was like a “long-odds gamble”, and that there’s a remote chance it could be real.

Those who never fall victim usually just throw away any fraudulent letters or delete the emails without reading them.

What Do You Think?

Are those that fall for scams gullible or simply unlucky? What can people do to prevent being victimised? Leave your comments here.

Hundreds Affected

Trading Standards are looking into a mobile phone insurance scam that may have affected hundreds of people across the UK.

The scam targets those with new phones, and makes people believe they are receiving a call from the shop or mobile phone network. 

Usually, customers are led to believe they are being offered cheaper insurance for their phone. However, after payment details are given, the consumer is lucky to receive poor quality insurance, and most receive no insurance at all.

Trading Standards say that the scam has been a problem for the last 18 months, and is looking into 10 companies in the Swansea area. It is also warning people not to give their details to cold callers.

Those involved are believed to be buying phones and calling numbers quite similar to their own until they find someone with a new mobile phone.

Speaking Out

One victim has spoken out. Rebekah Swift bought an iPhone for her sons 17th birthday. She explained her story: “I took him to Carphone Warehouse and bought him an iPhone and paid for some insurance.

“We came home and a few hours later his new phone rang and it was from some people who led him to believe they were from Carphone Warehouse.

“He came into the kitchen and he said they were offering a cheaper insurance deal and we thought that was great. I let him give my debit card details over the phone and thought nothing more of it.

“Then he received a text some while later from Carphone Warehouse warning him of an insurance scam going on and by that stage the money had already gone out of my account, and we’d both been scammed.”

What Do You Think?

Have you been targeted by these pranksters or pranks of a similar nature?  Do you have any advice for people in order to help them avoid being the victim, or ideas what they can do if they think they have been targeted? Leave your comments here.

As more and more people trade in foreign lands via the internet, there has been a marked jump in the number of reported frauds, scams and thefts.  Up until now it had been almost impossible to chase foreign based crooks, but now the European Commission and the Department for Business Enterprise and Regulatory Reform have joined forces to tackle cross border disputes.  The new UK European Consumer Centre (UK ECC) is one of 27 such centres across Europe and should now be your first port of call for cross border disputes.

The Scheme will cover goods purchased in the EU and will also take in Iceland and Norway who are both supporting the scheme.  This fast track way to attack and close down the crooks who plague the internet is being hailed as a major step by many in the industry – although some are speculating that it will only force the fraudsters and crooks to other areas of the world not covered by the ECC.

So how wide spread is fraud and illegal activity in the retail market?

While it is known that this kind of activity has increased dramatically since the internet offered access to all areas of the world, it is very difficult to obtain true and accurate figures because many people are ashamed to admit their own short comings when falling for these get rich quick schemes. 

Many commercial companies are very unlikely to report being the subject of such stings as it will affect their reputation, possibly alarm their customers and show them in a distinctly unflattering light.  While everyone knows that the scams cannot be closed down as quickly as they should be without people coming forward, the taint on a company’s reputation may be greater than any potential financial loss.

In this kind of market the scammers are often hidden from the rest of the world, causing untold financial heartbreak for far too many people.