Pension liberation fraud

Project Bloom, a new multi-agency campaign, aims to help prevent a form of fraud in which members of the public are encouraged to access their pension before retirement, without being properly informed of the potentially severe tax consequences.

Click to see press releases from Project Bloom

Pension liberation refers to pension scheme members transferring their savings to an arrangement which allows access to funds before the age of 55.  While in rare cases – such as terminal illness – early access to funds is possible, for most people the likely result is a tax bill of more than half of the pension’s value.

When added to the fees charged by the companies offering the ‘service’, there may be little or none of the money left for retirement.

The perpetrators’ approach to pension scheme members is usually via unsolicited phone call or text message, with a pushy ‘advisor’ offering cash incentives, ‘loans’, a ‘savings advance’ or ‘cash back’ from the individual’s pension.

Five key tips

As well as providing information to pension professionals, the campaign offers five key tips to help members of the public avoid becoming victims:

  1. Never give out financial or personal information to a cold caller.
  2. Find out about the company’s background through information online. Any advisers should be registered with the Financial Services Authority (FSA).
  3. Ask for a statement showing how your pension will be paid at retirement, and question who will look after your money until then.
  4. Speak to an adviser that is not associated with the proposal you’ve received, for unbiased advice.
  5. Never be rushed into agreeing to a pension transfer.

The initiative is supported by The Pensions Regulator, HM Revenue & Customs, the Financial Services Authority (FSA), Serious Fraud Office and SOCA (the Serious Organised Crime Agency).

Full information can be found here:

If you think you have been a victim of this or another form of fraud, contact Action Fraud on 0300 123 2040, or at Action Fraud.

Action Fraud is the UK’s national fraud and internet crime reporting centre. It provides a central point of contact for information about fraud and financially motivated internet crime. If you’ve been scammed, ripped off or conned, there is something you can do about it – get in touch with Action Fraud.

Beware the online pickpockets out to steal your wallet with your heart

Valentine’s Day is a day to celebrate the heart – and protect the wallet. Like many holidays, it’s also a feast day for many scammers. The Better Business Bureau just released a Valentine’s day themed public safety announcement specifically aimed at those who date online. Partnering with Western Union, it warned that among those special someones found online are fraudsters.

This is not the first time that Better Business Bureau has taken the time to advise US consumers to beware. “Ho Ho Hold on before sending money to people you haven’t met,” the bureau advised this past holiday season.

Full Story >> The Guardian


Thousands of Barclays customer files stolen and sold to scammers – report

Details of 27,000 people who consulted bank’s advisers were allegedly copied from database to be sold on to rogue traders

An investigation is under way after confidential files relating to  customers of Barclays Bank were allegedly stolen and sold on to rogue  City traders.

The Mail on Sunday said highly sensitive information including  customers’ earnings, savings, mortgages, health issues and insurance  policies ended up in the hands of unscrupulous brokers.

The leak was exposed by an anonymous whistleblower who passed the  newspaper a memory stick containing files on 2,000 of the bank’s  customers, the paper said. He claimed it was a sample from a stolen database of up to 27,000  files, which he said could be sold by for up to £50 per  file.

Full Story >> The Guardian

HMRC issues scam tax rebate warning

Taxpayers are being warned not to respond to emails promising them a refund, which are really a phishing scam designed to get hold of their bank account details.

HM Revenue & Customs said it would never send customers emails to arrange refunds, and urged anyone receiving one to report it.

In 2013, customers reported more than 91,000 phishing emails to HMRC, and in the three months running up to the self-assessment deadline on 31 January the number of scam messages reported was up by 47% on the previous year.

Full Story >> The Guardian

How did I manage to fall for a Goa gem scam?

Sarah Bowles is articulate and bright. Here she talks about how she lost her life savings in India to fraudsters

When Sarah Bowles woke up in a Berlin youth hostel on a chilly morning just before Christmas, she felt both sick and relieved. Sick because she knew that her £6,500 life savings were lost and she would have to explain to her family why she was in Germany rather than travelling in India. And yet relieved that her ordeal was over, not least as she had avoided the  real threat of ending up in prison.

Her story? She had fallen for one of the growing number of ingenious jewellery scams being perpetrated against lone travellers – particularly in the Indian state of Goa, but also elsewhere.

Full Story >> The Guardian

Fraud decrease serves as vindication and warning says CIFAS

The analysis of fraud trends during 2013 by CIFAS – the UK’s Fraud Prevention Service reveals a surprising mix of apparently good and equally alarming news about fraud.

Overall, fraud levels decreased in 2013 by 11 percent from the levels recorded in 2012 – the first year on year drop since 2010 – but fraud remains at a much higher rate than in pre-recessionary times. The decrease, however, is proof of the positive preventative impact of counter fraud measures such as data sharing. While there are some alarming fluctuations within the fraud figures, the most notable findings are: Over 221,000 confirmed frauds were identified during 2013. While this is an 11 percent decrease from the previous few years, the level is still higher than fraud levels recorded in 2008 and 2010. Identity crimes – where fraudsters use a person’s identity data to impersonate them (identity fraud) or hijack an individual’s existing account (facility takeover fraud) – still accounted for over 60 percent of all frauds. Over 125,000 individual instances of an identifiable person becoming victim to fraud. Some startling variations from 2012 have occurred in terms of the products targeted by fraudsters: frauds against mail order and bank accounts have experienced sizeable decreases, while loan and plastic card (e.g. store and credit cards) accounts have seen notable surges. Plastic cards are now the product most commonly targeted by fraudsters (up by 24 percent from the levels of 2012 and accounting for 30 percent of all confirmed fraud in 2013).

Full Story >> HRDirector Business News

The identity thief’s 10 most desirable items


Theft used to be more straightforward: you could identify your valuables, and keep them locked up. And in the worst case scenario, if someone broke in and stole them, you’d know about it instantly. Identify theft is a whole new ball game. We don’t know what’s valuable to a fraudster; we don’t know how to protect them; and often we have no idea when they are taken.
So what are the 10 most valuable items for an identity thief, and how can we protect them?
Ideally, a thief needs a number of things in order to steal your identity – and your money. Your full name, address and date of birth are highly useful. But add in any account numbers, passwords, PINs, or details about your borrowing limits, and they’re in the money.

Full Story >>

The Psychology of Lies: Behavioural Science Perspectives on Conducting Successful Interviews

There are plenty of myths about the “science” of lie detection despite what books on nonverbal behaviour may say. There is no scientific evidence that crossed arms or legs indicate a defensive person, or that deceivers touch their noses, Evert their eyes, or cover their mouths. Spotting a lie is an inexact science.

Can investigators improve their chances of discovering deceit during investigative interviews?

Why Humans Are Good Deceivers and Lousy Detectors

Humans are better liars than they are lie detectors. This point is evidenced in various academic studies, which suggest that most people are no better than 50/50 at detecting deception by observing verbal and nonverbal cues. Even professionals involved in fighting crime such as law-enforcement fair only a little better than chance at detecting a lie. In essence even if law enforcement as a whole was better at detecting deception than the general public, that isn’t a particularly impressive statistic.

Most people are no better than 50/50 at detecting deception by observing verbal and nonverbal cues. But there’s hope yet for lie detection science.

Many previous experiments are based on low-stakes lies. In the real world, lies that concern investigators or potential employers are usually high stakes—in other words, liars in the interrogation room have a lot more to lose than study participants.

As anxiety lies at the root of high-stake lies—if unmasked, the deceiver faces stiff consequences. But the researcher’s dilemma is that high-stakes lies—and the anxiety associated with them—are hard to ethically replicate in a laboratory.

How to be a Good Liar

Naturally, some people are bad liars; but professional investigators are concerned with the gifted ones. It stands to reason that to be a good lie spotter; the investigator needs to know what makes a good liar. Sometimes the investigator may need to be good a liar himself in order to go undercover or pretext.

Accordingly good liars are ultimately good actors. So how to lie convincingly is to “rehearse” in order to reduce anxiety; by creating plausible responses by interweaving deception with truth. In theory then good lying, like good acting, is an art that requires a plausible story, well-practiced.

There are, however, pathological types that make natural liars: psychopaths and pathological liars such as those suffering from Munchausen syndrome. Pathological liars may tell lies with ease, but they are usually unmasked over time by inconsistencies.

Psychopaths, on the other hand, are natural chameleons that mimic the behaviour expected of them but have little or no emotional attachment. In essence, psychopaths have little fear or anxiety but are natural actors. A “lack of stress” enables them as deceivers.

Like the psychopath that simulates love for another when it serves him, good liars uses a measure of control over emotional appearances to overcome discovery. The possibility that a liar will be unmasked naturally creates the desire to avoid the issue, but a savvy liar can take the offensive.

For instance, he may mimic anger or hurt in response to an accusation that’s true. The seeming natural response would be anxiety or embarrassment, but a good liar can turn the tables, emotionally speaking.

A final quality of good liars is self-deception. Self-deception reduces anxiety by justifying the lie.

Catching Liars through Cognitive Taxation

The idea here is that lying requires extra psychological effort at creating a plausible story, whereas the truth doesn’t, because the teller is simply recalling, not inventing. An interviewer can exploit this fact through several strategies (as summarized below):

1. Ask for details.

The more details the interviewee provides the more chance of inconsistency. This fact alone may cause the guilty interviewee to be reluctant about answering questions or to give short or vague responses. If the interviewee is reluctant or vague in responding to a question, the interviewer should pursue the subject further.

Borrow from the techniques of “cognitive interviewing”—developed to enhance eyewitness’ memories—because they are useful in encouraging the subject to report details. Such techniques include asking the subject to describe his story with richness and imagery and to reassure him that no detail is without significance or is too trivial.

While inconsistency, vagueness and hesitancy can be signs of deception, details provide the practicality of more information that can be cross-referenced and validated.

2. Ask unexpected questions.

Just as the would-be-liar rehearses responses to anticipated and expected tough questions, the interviewer should try asking “unexpected questions” as a counter-measure. To be successful, the interviewer must be able to develop relevant questions that the interviewee doesn’t anticipate. Liars produce fewer details when responding to unanticipated questions than truth-tellers.

3. Conduct an information-seeking interview rather than a confrontational interview.

Law enforcement methodology is to progress from interview through to accusation. Basically, this is a presumption of guilt from the outset that incrementally increases pressure on the subject to make a confession.

In contrast the information-seeking interview is one in which the interviewer aims to build rapport and plays a sympathetic role in order to coax out facts. Information-seeking approaches yield more information and cues to deceit than confrontational approaches.

4. Strategic Use of Evidence

The non-accusatorial interview is the asking of open-ended questions and presenting evidence late in the interview. This does reveal more inconsistencies and contradictions than when any evidence is introduced early.

Furthermore, when the interviewer asks formulated indirect questions specific to the evidence without revealing the interviewers own knowledge of that evidence, the ability to detect deception significantly increases. (Such questions are also introduced at a late stage in the interview.)

Catching Liars through Emotional Leakage

Micro-expressions betray a person’s true feelings, but you almost need a video camera running in slow motion to see them although a person can either be trained to see them in real time or be very experienced through conducting many interviews.

Unfortunately individuals have different baseline behaviours and different levels of response. For instance, one person may be naturally anxious in most situations, while another may become anxious when asked questions that he believes may falsely incriminate him. There are also liars who show little anxiety because they are well rehearsed in their deceit, are self-deceived, or suffer pathological conditions.

A guilty person facing the possibility of unmasking should be anxious, but so, too, could an innocent person in fear for his freedom…remember that there are exceptions to every rule.

Parting Wisdom

Unfortunately, a popular belief on nonverbal behaviour and lie detection has managed to leak into texts on police interviewing and interrogations.

Nonetheless, behavioural science is making headway, and investigators should pay attention. An interview with a suspect relies on a psychological strategizing that aims to unmask the truth. Deceit betrays itself by behavioural and narrative inconsistencies.

Looking for incongruences in a subject’s story and behaviour is common sense, but investigators can improve their chances of discovering lies by aligning their strategies with advances from the behavioural sciences. Watching for involuntary micro-expressions and the theory of cognitive load are two such advances that can aid an investigator’s tactics and observations.

The investigator must consider all possibilities when interpreting the significance of a statement, pause, contradiction, gesture or hesitation. The goal shouldn’t be to become a psychological X-ray machine, because that’s currently impossible.

Instead, the investigator should aim to acquire verifiable intelligence, and/or, if the intelligence merits it, a true confession.

Frank Nesbitt MA MEWI