When the deal is too good…….

Compliance Team
05.03.20
6 minute read

At TransferWise, one of our top priorities is to protect our customers and keep their money safe. Our dedicated financial crime team deters, prevents, detects and protects our system from being used by criminals.

We’re passionate about fighting crime and catching the baddies, but there are some important things you can do to keep yourself safe and avoid falling victim to a scam.

A scam is an illegal way to make money, often by using trickery. Below are some of the most common scams that you should be aware of and a few tips on how you can protect yourself from becoming a victim. As a rule of thumb: when a deal is too good to be true, it usually is…

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unicorn-money

Investment Scams

Investment scams come in many forms. The common theme among them is that you are required to put some money in a venture that will often yield a very high rate of return. Too high, in fact. This can seem enticing but is often unrealistic and higher than any rate offered by legitimate companies. Investment scams can occur over a short or a long period of time. Scammers will often try to convince you of the legitimacy of the investment by offering dividends or “cash backs” before convincing you to invest some more money.

Before you entrust your money to that polite person on the phone or put your details on that very sleek website, take some time to look it over. That glossy leaflet that came through your letter box, or that smartly dressed person at your door might be promising the golden goose by asking you to invest in some rare, vintage wines or in a company that is soon going public, or in something else that will make you a bit more wealthy. Nevertheless, be diligent, this might just be a scheme to take your hard earned money.

If you are thinking about making an investment, consider the following:

  • Contact: How did you hear about this investment? Did you initiate contact or were you contacted? Where you have been contacted out of the blue, there is a high likelihood that it is either a high-risk investment or a scam. Where you have initiated contact, make sure you have checked the points we list below.
  • Authorisation: Almost all financial services firms must be authorised by a national supervisory authority, who keep online registers. In the UK, for example, you can check the authorisation of a company in the FCA register. Other countries have their own national registers you can check. Log in using the official link rather than the link provided in an email or text. Always be careful of companies registered in countries where there is no regulation of financial services or where you might have trouble getting legal redress.
  • Legitimacy: Check that the firm you’re investing with is not a ‘clone firm’. Scammers will often pretend to be from an actual legitimate firm that is authorised by the local authority. They often can furnish you with the website and legitimate employees’ details. To verify the identity of an authorised firm ask for their Firm Registration Number (FRN) and contact details, but always call them back on the switchboard number given on the Register or the official number listed in formal companies registers such as Companies House. Consider direct contact with the local regulator to verify whether a firm or advisor is appropriately licensed and operating legally. If an investment is in another company, contact them directly to confirm if this is possible.
  • Legal and financial advice: If all the above checks out, it might be best to consult a legal advisor to check over any contracts and agreements or a financial advisor who is qualified to advise on investments.

pigeons-in-paris

Romance Scams

Love makes the world go round. Unfortunately, people can exploit your good nature. Romance scams involve someone feigning their feelings and using your goodwill to commit fraud.

Romance scammers commonly create fake profiles on social media, online dating sites and contact their victims via these platforms. They will develop a relationship with their targets, building trust and expressing strong emotions over a relatively short period of time. Scammers can go to great lengths to gain interest or trust - this can be emotional manipulation, sharing of ‘personal information’, or even sending gifts. In reality, this serves not only to gain trust but also to encourage victims to share their own personal information - and make it easier for the scammer to steal their identity.

In most cases, a scammer will eventually ask - outright or subtly - for money. They might ask you to send money directly to them, or for your bank or credit card details. It could be for anything, from a plane ticket to visit you to an urgent medical emergency.

If you are thinking of sending money or sharing your financial details with someone you have known for a very short time but love very much, here are a few things you can do just to make sure the glass slipper fits:

  • Never send money to someone you haven’t met in person

  • Pay attention to spelling and grammar mistakes and look out for inconsistencies in their stories

  • Be careful when sharing personal information or pictures and videos with prospective partners - romance scammers have been known to attempt to blackmail their victims

sun-glasses-at-pool

Rental Scams

We all love a good holiday. Unfortunately, this has created an opportunity for holiday rental scams. Rental scams involve the booking of villas or apartments that don’t exist. Rental scams can take different forms. It might be that a legitimate accommodation owner has been hacked by fraudsters, or it might be a fake advert listed on a popular holiday rental app or website, or where a fake holiday accommodation website is established using photos/details from legitimate websites.

While they can be difficult to spot, there are a number of ways to protect yourself from falling victim to a rental scam. So before you send that money and pack those bags:

  • Avoid payment via bank or wire transfer, use credit cards to book through websites instead. Never send card or account details directly to a property owner
  • Do research into the website and/or property you are looking to book. Read reviews and take note of how long the property has been listed
  • Contact the property owner, and ask questions about the local area and its amenities. Legitimate owners are more likely to give detailed knowledge of the area, whereas a fraudster is less likely to be able to provide such detail
  • When booking through rental listing sites, ensure that you follow their terms and conditions so that you are eligible for any booking protection. Make sure that all contact takes place via these websites or in the app to reduce the likelihood of corresponding with a fraudster

What to do if you have been scammed?

If you are unfortunate enough to have encountered a scammer or believe that you have unwittingly become a victim of a scam, where you may have paid with TransferWise:

  • Contact your bank. They will attempt to stop the payment if it is in progress or will reach out to us with the relevant information if the payment has already been sent out
  • Report the scam to your local fraud authority. In the UK, you can report to Action Fraud - If you are in immediate danger, contact the emergency services
  • Contact the relevant supervisory body to report any clone websites or individuals
  • If it is a rental scam, contact the booking site, you may be eligible for protection if all transactions and correspondence were done in the website or app

Want to help us win the fight against the bad guys? See all our current roles here.

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