Why is this important?
Scams are schemes to con you out of your money. They can arrive by post, phone call, text message or email, or from someone coming to your home.
Car matching and electricity meter scams and fake lotteries are just some of the tricks that scammers try.
Read this page to find out about some common types of scam.
An example of a simple pyramid scheme
Eight people are asked to each pay £1,000 into a scheme and are told they will each get £8,000 when they reach the ‘top’ of the pyramid.
For each of those eight people to get that amount, another 64 people need to join. Those people each need to pay £1,000 and will all be expecting to collect their £8,000. But that would mean another 512 people would have to join.
Each person needs another eight people in the scheme to get their money back and make a profit. Eventually, the supply of people with £1,000 must end, leaving most people in the scheme losing all their money.
You place an advert to sell your car and get a call to say an immediate buyer has been found. You are asked to pay an upfront fee which you are told is refundable if the car isn’t sold. The car isn’t sold and you aren’t refunded.
Doorstep electricity meter credit
If you use a pre-payment meter you are offered cut-price electricity,. For example, £50 of electricity is offered if you pay just £25.
Criminals then use cloned keys to top up energy credit illegally. Electricity companies don’t get paid for energy used, and you end up paying for the energy twice – first to the fraudsters and then to the company at the correct rate.
Never buy electricity from someone who knocks at the door. Electricity is not sold in this way by companies.
- Find out where you can buy electricity for pre-payment meters from Top-upsafe at: www.top-upsafe.com
Prize draws, sweepstakes and foreign lottery scams
You're told that you've won a prize in a competition that you haven't even entered. To claim the prize you have to pay an administration fee. You pay the fee and either get back nothing or get something worth less than the fee you’ve paid.
Miracle health cures
Miracle health cures or ‘scientific breakthroughs’ offer you health products to cure a problem such as arthritis, diabetes, or cancer, or to help you lose weight. The seller often promises a no-risk money-back guarantee or a free trial. There are often quotes from doctors and happy customers.
These types of products and medicines are unlikely to do you much good, and might even harm you. Talk to your GP before you buy any of these products
Reporting a scamYou can report scams on the Action Fraud website. Go to: www.actionfraud.police.uk.
You rent a property and the landlord asks for a deposit of a month’s rent before checking your references. You sign a contract saying that if the references aren’t satisfactory, your deposit will be paid back, minus a fee for checking the references.
Your landlord then tells you your references are unsatisfactory, even though you know they're fine. The landlord then refuses to return all the deposit.
Pyramid selling and chain gift schemes
You go to a presentation and are told that after paying a joining fee, you can earn lots of money recruiting others to the scheme. This is pyramid selling which is illegal. You are unlikely to make any money.
You may be offered an expensive gift if you buy a low value gift. To get your expensive gift you have to recruit new members to the scheme. You are unlikely to get the gift.
Working from home
You see an advertisement offering work which you can do at home, for example, stuffing envelopes or putting together home assembly kits. You're asked to pay a fee upfront and then find there's no work on offer, you only get paid if you get others to sign up, or you do the work and don’t get paid for it. For example, you assemble a kit and are told the work isn’t up to standard and you won’t be paid.
A genuine home-working scheme won't ask you tp pay money upfront and will explain in writing what you are expected to do, how much you will earn, and when you will be paid. You should also be paid at least the national minimum wage.
Other useful information
Age UK scams advice at:www.ageuk.org.uk
Action Fraud A-Z of scams at: www.actionfraud.police.uk
Metropolitan Police information on scams at: content.met.police.uk
Think Jessica information on scams at: www.thinkjessica.com