How to avoid financial scams

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How to avoid a savings account or fixed rate bond scam

Financial scams are still prolific in the UK, with UKFinance* reporting that consumers lost £580m to fraudsters in the first half of 2023. A newer scam sees criminals promoting popular savings accounts such as fixed rate bonds and ISAs on fake, or cloned, websites in order to steal money and sensitive information from would-be savers. We look at what the scam is, and how you can limit your chances of becoming a victim of this crime.

What does the fixed rate bond scam look like?

Offering too-good-to-be-true rates (which are considerably higher than the market average) on what look like legitimate websites, these scams lure those looking for a better return on their money into giving away their details – and ultimately, their money. There are three ways criminals are carrying out this con:

They create a new website promoting popular savings products. The website may look legitimate, and contain all the information you’d expect to see from a financial services company, even if you hadn’t previously heard of the company name.
They clone or copy the website of an existing, legitimate bank or financial services company. They’ll use the company name in the URL, and the company’s logo and branding across the website, so it looks exactly like the well-known, reputable brand that you’re familiar with. As above, they’ll promote the fake rates on these websites.
They set up a fake price-comparison website, purporting to be a neutral, independent body. They’ll then ask for your information and contact you by phone or email, where they’ll then attempt to sell you the fake financial products.

Although the starting point of this scam can vary, they tend to work in the same way. These websites will ask for your personal information and encourage you to set up financial products. You would then transfer money into your new savings product – but of course, these products don’t actually exist, and instead the scammers steal the money you’ve transferred.

The fraudsters may also ask you to create an online account to ‘manage your products’, but they’ll then use these personal details (such as your password, or memorable information) to attempt to access other accounts you have open in your name.

What should you look out for?

The websites often look convincing, and criminals may use a number of additional steps to convince you that the company is legitimate. For example, they may buy adverts on search engines (such as Google or Bing) so that when you search for terms such as ‘fixed rate bonds’ and ‘best interest rates’, these ads appear at the top of the results page, and appear more legitimate.

So what should you look out for when you click through to a website? Warning signs that the website may be fake include:

Rates that seem too good to be true. Interest rates in the UK have seen an increase during 2022, but even the most competitive interest rates sit around or below 5.00% AER. Be suspicious of anything above this rate, or anything that promises significantly above-average returns.
Spelling or grammatical mistakes. Look out for badly-written text on the website or in other communications they send you, including spelling or grammatical errors.
Broken links or missing information. Look out for missing contact details, such as an email address or phone number, or links that don’t work, or take you to a blank page.

How to avoid a financial scam

It’s better to be safe than sorry, so make sure you carry out your own research, no matter how trustworthy a company looks. Check the company’s official website and speak to them directly if necessary. Take a look at the website’s T&Cs to ensure they are FCA regulated, and, where relevant, FSCS protected. You should also check that the company is listed on the Financial Conduct Authority (FCA) Financial Services Register.

If you’re unsure whether the website you’re looking at is the official one (in the case that the website has been cloned or copied) you can find the correct URL by searching for the company on the FCA register. You could also check the company’s associated social media channels and their TrustPilot page to find this.

Be wary of anyone you don’t know contacting you over the phone or via email, and be especially wary of anyone contacting you through social media or a messenger app, such as Whatsapp. Take Five, the UK’s fraud-fighting campaign, suggests that taking five minutes before acting could make all the difference. If you receive a call, email, or other message and something feels even slightly suspicious:

Don’t give out your bank details or any personal information
Don’t make any payments, or amend or confirm bank details
Don’t click any links or attachments in emails or texts
If it’s a call, hang up and ring back later using a number you trust from the official website.

As Take Five says, it’s ok to reject, refuse or ignore any requests. Only criminals will try to rush or panic you.

Reporting a financial scam

If you think you’ve fallen for a scam, contact your bank immediately and report it to Action Fraud. They can be contacted on 0300 123 2040 or online via their website.