Financial scams
What you need to know about financial scams
A financial scam is an attempt to con you out of your money. Scammers use increasingly sophisticated methods, including fake websites, phishing emails, scam texts, phone calls and more to steal your money or personal data.
Watch for urgent requests, suspicious links and offers that seem too good to be true. Always verify contacts, check if firms are regulated on the Central Bank of Ireland register and report scams to your bank and your local Garda station.
If you think you’ve been scammed, contact your bank immediately and report the incident to your local Garda station. Learn more about avoiding scams from the Central Bank info and FraudSMART.
What are the main types of financial scams?
Financial scams come in many forms, but they all aim to trick you into handing over money or personal information. Understanding the most common types of scams can help you recognise the warning signs early and protect yourself. Below are the main scam types to watch out for, each with its own tactics and red flags.
Card scams
- Card skimming – copying card data using a skimmer device
- Card trapping – trapping your card in an ATM
- Contactless card scams – using a card-reading device to steal card details
Contactless card scams
Contactless scams happen when scammers use a card-reading device to steal the card number and expiry date from your debit or credit card. They then have these details to pay for items online. With contactless technology, they only need to have the device close to your card and can even get your details while your cards are in your pocket or bag.
Ways to keep your card safe:
- Never write your PIN down. Try not to use the same PIN for all your cards.
- If you notice anything unusual about an ATM, do not use it. For example, the keypad may seem loose, or the card reader is sticking out.
- Use ATMs that are in busy well-lit areas. Those in more isolated areas can be easier to fit with skimming devices.
- Keep a close eye on your bank statements. Check for any unusual activity and contact your bank immediately if you notice anything.
- Keep your bank card provider’s contact number close to hand. You may need to let them know immediately of any suspicious activity in your account.
- There are ‘RFID shield’ purses and wallets available that can protect your card from being read by card-reading devices.
- Never let someone take your card out of your sight to process a payment.
Pension scams
Pension scammers trick people into taking money out of their pension funds. Scammers try to convince you to reinvest your pension with the promise of high returns. Victims are urged to transfer their pension pot into a scheme that doesn’t exist.
Scammers make contact by email, text, social media or cold call you. They’ll typically pose as a pension adviser and pretend to be from a legitimate financial or investment company. Copycat ads imitating legitimate schemes are a common ploy online.
Warning signs of a pension scam:
Scammers create very convincing offers to persuade you to transfer your pension. There are certain signs you should be alert for:
- Investment offers out of the blue
- Promises of “guaranteed” or high returns
- Fake investment comparison websites
- Pressure to act fast with a time limit
- Offers to review your pension
- Someone asking you to release money from your pension fund before you reach 55
Golden rules
- Stop, think and check – if it seems too good to be true, it probably is
- Refuse to hand over money immediately – very few legitimate investment opportunities ask for this.
- Don’t be rushed into decisions
- Research the investment to decide if it’s genuine
- Be wary of ‘free’ pension reviews
Who to contact
If you think you may have fallen victim to a pension scam, contact your bank immediately. Report unauthorised pension funds providers to the central bank. You should also contact your local Garda station. If you’re thinking about changing your pension arrangements, get financial advice. The Pensions Authority provides further information.
Money mule scams
Money transfer scams use “money mules” – people recruited by criminals to move illegal money through their bank accounts, often for a commission. Many victims don’t realise they’re helping criminals launder money. Students, unemployed people, and newcomers to a country are especially at risk.
Why money muling is so serious
Most people targeted by money mule scams don’t realise the money they’re asked to move is illegal and comes from other crimes. Moving this money helps fund serious criminal activity, which is why money muling can lead to a criminal record.
How money mules are targeted
Tempting offers: Scammers lure you with offers that seem too good to be true, such as work-from-home jobs, freelance opportunities or ads looking for “money transfer agents.”
Moving the money: Once money lands in your account, you’ll be told to transfer it to another person’s account – starting a chain that hides the criminal’s identity.
Manipulating your account: Criminals use your account to distance themselves from detection and law enforcement.
Financial tools used: They may move funds through bank accounts, cashier’s cheques, virtual currencies, prepaid debit cards or money transfer agencies.
Signs of a money mule scam
Crime groups have developed new ways of scamming people into becoming money mules. This fraudulent activity mainly takes place online. People can be approached in person too.
Here are the main red flags to be aware of:
- Direct approaches through social media or messaging apps
- Emails asking for bank details or to click dubious links
- Social media posts advertising jobs with high rewards
- Professional-looking websites that mimic genuine businesses
If you get caught by a money mule scam
It is a criminal offence to act as a money mule. You should immediately notify your local Garda station if you believe someone is trying to scam you into becoming a money mule. Reporting the incident to the Gardaí could save other people from falling victim.
Invoice redirect scams
Invoice redirect scams involve an individual or business getting cheated into sending a payment to a fraudulent account. It is also known as payment redirection fraud.
In this type of financial fraud, the scammer will pretend to be a supplier of goods or services that you already do business with. They contact you to tell you that their bank account details have changed and ask you to send future payments to a new account.
This ‘new’ account is controlled by the scammer. Invoice redirect scams have all the classic signs of a phishing scam. It is important to know the signs of phishing.
Phishing is when scammers try to trick you into giving away personal or financial information by pretending to be a trusted organisation, usually through fake emails, texts or websites.
How an invoice redirect scam works
The scammer will contact you, pretending to be a supplier known to you. Be mindful that AI deepfake voice scams use synthetic audio to impersonate trusted individuals, tricking victims into transferring money or sharing sensitive information. They may ask you to change the bank account details you have for the legitimate supplier. After you change the bank details and send payment to the scammer’s bank account, the funds are quickly withdrawn.
Tips to prevent invoice redirect scams
As the victim of an invoice redirect scam, you may not realise what’s happened until the legitimate supplier sends their invoice for payment. This can be some time later, so it’s vital you know what to stay alert for and what actions to take:
- Always contact suppliers using a trusted phone number.
- Check email addresses are spelt correctly.
- When paying an invoice, confirm payment and the precise bank account.
- Always check the IBAN number provided – which country is it in?
- Delay transferring any payment until you’ve had a chance to check it out fully.
Who to report it to
Contact your bank immediately if you receive a suspicious email relating to payments. They can advise you what to do. If you believe someone is trying to scam you into redirecting payment, you should contact your local Garda Station.
Further information
The Central Bank of Ireland has more information on how to protect yourself from financial scams. FraudSMART has tips and information to help you avoid falling victim.
