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Getting ripped off doesn’t have to involve being held at gunpoint. In fact, it doesn’t even have to consist of being actively deceived, it can be simply paying more for something than you need to. We get scammed in all areas of life, mostly because of our own ignorance and inertia.

• Get savvy about scams to protect yourself
• Learn about the warning signs
• Find out how to protect yourself
• If you’ve been scammed, here’s what to do

In 2008, a new and more comprehensive set of unfair trading regulations was brought in by the Office of Fair Trading in order to give us more protection from scammers. Within the regulations 31 specific practices are identified which will always be considered unfair under the law, and are therefore prohibited.

The regulations state that ‘evidence of their effect, or likely effect, on the average consumer is not required in order to prove a breach of one of these outright prohibitions’. If you want to find out more about what sorts of practices are included, you can download the Office of Fair Trading’s guide here.

So these new trading regulations offer us as consumers better protection, but there are still tons of simple things that you can do to avoid losing money needlessly. Let it be you and not the scammers who has more money and be very smug about it!

Get savvy about all things scam

Follow these simple golden rules to help avoid getting scammed:

^{1. Get clued up about money} 

Know how much you’ve got, know how much things should cost and know where the dangers of losing your money lie.

^{2. Keep up to date about rip-offs and frauds}

This doesn’t mean phoning the local police station for updates every week.  Instead, keep your eye out for news stories in the papers or on the internet about scams.

There are also more entertaining ways to learn about scams; the BBC has a series called The Real Hustle in which BBC actors carry out scams that fraudsters use in real life to see if they work. They are shockingly effective, but once you know what they look like you’ll be able to spot them. It is currently being repeated on BBC Three so why not enlighten yourself about just how easy it is to be conned.

3. Shop around

Just because something seems cheap to you somewhere it doesn’t mean you can’t get it cheaper elsewhere. Beware of bargain deals, often two-for-ones in the major supermarkets only save you a couple of pennies and this is true of most deals, for if they really were that much cheaper, then the retail outlet would lose too much money by offering them. Have a look at some of the other sneaky tricks supermarkets employ to con you into parting with more money.

When you’re shopping on the internet there is really no excuse not to do a little bit of extra surfing to check out what prices other sites are offering for the same product. You can use sites like Kelkoo and Pricerunner to help you, but ultimately these guys only deal with people who pay them as an affiliate, which smaller companies won’t be able to pay for, so look elsewhere too.

You should also do your research if you’re trying to make more money; there are some shady characters out there who promise to make you richer, but end up ripping you off to make themselves richer.

4. Keep shops, banks and service companies at arm’s length

Even though they’ll give you that cheesy smile and pretend to be your friend, ultimately they want to make money out of you. So take a step back and try to remain objective about what products they are trying to sell you and buy things because they are right for you and not just because you feel guilty about saying no.

5. Be aware of the dangers of giving out your details

Whether it’s on the internet, on your Blackberry or on your phone, digital technology means that it is increasingly easier to copy these details and use them to pernicious ends. This is especially true when using your credit or debit card. Although you think that your details should remain confidential, and yes, chip-and-pin cards do offer more security, the only way to truly protect your card is to never let it out of your sight.

Warning signs

Whether you’re out to make a bit on the side, or simply to find the best deal you can, make sure you know how to spot a scammer. According to the Office of Fair Trading (OFT) most scam artists will try to get you to do one of the following:

1. Send money upfront

Run a mile from anything that asks you to send them money, whether it’s a company that asks you for money to get started in your new career or you’re asked to pay ‘administration costs’ or a ‘transfer fee’. Remember it’s probably a rip-off so do not send any money until you have checked out the company. If you don’t hand over any money, you can’t lose any money.

2. Give your bank details

Once a fraudster has your bank details they will make sure they clean out your account so be extremely wary of giving out any personal information to anyone.

You do have to exercise a bit of judgement here however; many legitimate companies pay staff by transferring cash straight into their bank accounts – it may be the way you are or were paid in other jobs. In order to make the payment, the company needs to know which account it’s going into.

For example, TNS one of the largest companies that takes on mystery shoppers, asks for new participant’s bank details when you go through the registration process. Some online survey sites operate in the same way. But if you have a strange feeling about the company, it’s probably best not to get involved.

3. Ring a premium rate number

In the UK premium numbers start with 090 and ringing them to claim your usually bogus prize will cost you a fortune. Increasingly scammers are targeting mobile phones so be wary of returning a missed call from a number you don’t recognise or replying to a text message that asks you to reply to it in order to claim a prize because they may be charged at a premium rate, too.

4. Buy something to win a prize

Scammers are very clever and persuasive but you should always be extremely sceptical of any offer that requires you to spend money in order to win something.

Once you know what to look for all you’ve got to do is keep an eye out and take some practical measures to prevent those scammers from getting their mitts on your cash:

5. Be on your guard

Don’t immediately trust people in suits or in posh offices. Appearances can really be deceiving and clever scammers will know this. The best rule of thumb to remember is; the flashier they are, the more wary you should be. This rule also applies online; make sure you check out websites and online companies thoroughly before agreeing to anything. To find out more about this, have a look at our online fraud article.

Protect Yourself

Check your records regularly

Make sure you keep an eye on your credit record if you think there is any chance you have been scammed. Sign up to one of the credit report agencies like Equifax, CreditExpert or Callcredit Check and you’ll have 24-hour access to your credit file.

Don’t know what a credit report agency is? Click here to find out. You’ll then be able to see immediately if anyone is trying to use your identity to set up dodgy loans or other forms of credit.

Beware of homeworking schemes

Why? Because “work from home” schemes are one of the areas where being asked to pay for work is most common. As well as ads online, companies may advertise in shop windows promising you work doing something like envelope stuffing.

But to get the work, you are asked to pay for a starter pack or kit – either information and/or the materials to get started. You may also see ads asking you to pay for a directory of homeworking opportunities.

Don’t fall for any of these – there’s no guarantee you’ll get what’s being advertised (the chances are, you won’t) and it’s hard to get your money back once you’ve handed it over.

You are not a bank

Beware of companies which ask you to do any kind of financial transaction, or offer to pay money into your bank account for doing very little.

A famous example is the so-called “Nigerian” 419 scam. This involves someone from a foreign country asking you for help in transferring money out of the country. They say they will pay a whopping sum into your account, and then let you keep a percentage of the money in exchange for your cash.

We’ve also come across companies that claim to be based abroad, and ask you for help in getting payments from their other clients in Europe.

Just think about this for a minute. If you were in possession of thousands of pounds, would you pay it into the bank account of a complete stranger? What’s to stop the stranger just walking off with the money?

Similarly, big companies have accounts departments and established systems for keeping track of their funds. They don’t go around pushing money through the bank accounts of complete strangers.

The chances are, the “company” or “millionaire” will use your interest to start to try to get money out of you, always with the promise of more money for you.

So if you’re asked to do something like this, keep well away.

If it sounds too good to be true… it probably is

Any time you’re faced with a money-making proposition that sounds so fabulous you can’t believe its true, listen to your gut instinct. If someone is offering the possibility of making thousands in a week, the probability of it being a scam is almost as high as the revenue they are boasting.

Research, research, research

Always check any financial product or business venture thoroughly. Look out for professional looking websites that seem to be kosher, but fail to provide you with their registered address and regulatory details. When in doubt, contact an independent financial advice service who will be able to tell you whether the business is genuine or not.

Never hand over money on the promise you will make a fortune back

If the idea was so good, then the business should be keeping it to themselves and making their millions rather than sharing it with you. So if someone is promising you a fortune you should never hand over your money as in reality the only outcome is you losing a fortune.

Check your ‘greed’ level every now and then

We all want our slice of the pie, but if there’s one thing that can make you vulnerable to really bad scams it’s greed. Most of the richest people in society had to work really hard to start off their business ventures. So, if you really want to make money try investing some hard work in your future and stop hoping to get rich quick.

Don’t rush into anything

All major financial decisions, regardless of incentives offered on the spot, should be considered at least overnight. If someone is offering you something only if you sign for it on the spot, they are trying to pressure you into taking a deal that may sound good, but there will inevitably be a catch. By taking the time to consider financial decisions properly, you are much less likely to get caught out.

Know your rights

One of the new prohibited practices identified in the unfair trading regulation is unwanted solicitations by phone, fax, email etc. Although you might not consider this a scam, essentially it’s another way companies try to get their hands on your money. Often they’re more of a nuisance than anything else, but what can you do to stop them?

Firstly, you should register with the Telephone Preference Service (TPS). This is completely free, and pretty easy to do. If your landline is already ex-directory that’s great, but if not, getting TPS registered is probably the easier option.

Sadly, this can’t stop cold-callers trying to scam you altogether; calls from outside of the UK do not have to adhere to the unfair trading regulations and rather shockingly anyone can pay a small fee (usually about £3-4) to access your phone details on the electoral role.

So is there anything else you can do? Be very selective in who you give your phone number to. You might have inadvertently allowed these people to call you by either ticking or not ticking boxes when entering competitions or buying online for instance, which means you may have opted to receive information by phone.

Always read the small print and make sure that if you don’t want these phone calls you opt not to receive any information from third parties. Failing that, if you still get calls, make clear that you’re not interested and if they do call back, they are in breach of the unfair trading regulations and you have every right to make a complaint against them. If you mention this to them, its highly unlikely they’ll be bothering you again!

Still not sure?

Keep your wits about you, do plenty of research on the company, and ask for advice. The organisations below may be able to help.  And if in doubt, just walk away – that way you can’t lose out.

What if you have been scammed?

Don’t feel stupid, you’re not alone. According to the Office of Fair Trading more than three million people lose about £3.5 billion a year at the hands of con artists. Remember that many scams are highly sophisticated and even experienced investors have fallen victim to slick, clever, and professional scammers.

If you’ve been scammed you won’t necessarily get your money back but by reporting it to the relevant authorities you may be able to stop other people from being caught out and it could help stop those con artists in their tracks.

If you want to contact the Office of Fair Trading with a specific query you can send them an email to enquiries@oft.gfi.gov.uk or alternatively call Consumer Direct on 08454 04 05 06 or you can report a scam on the Consumer Direct website.

Useful Links

• Office of Fair Trading
• Consumer Direct
• Advertising Standards Authority
• Metropolitan Police fraud alert
• Experian
• Equifax
• Callcredit Check

Have you been scammed?  You can share your experiences and advice with other users in the comments below so they don’t fall prey to the same scheme.

Alternatively, you can vent your frustration by leaving a comment on our Rip-off Britian Blog.