Payment protection insurance (PPI) is one of the biggest frauds in the UK wherein millions of people were victims of fraud, and later compensated by the government for policies that were deceptively sold to them.

In PPI scams, dodgy scammers pretend to be legit workers from claims companies to trick people. They ask for money upfront saying you’ll get a payout but it’s all a scam and you ain’t seeing that cash again.

It’s properly important to know how these scams work and how to keep yourself safe so you don’t end up losing your hard-earned cash.

What are PPI refund scams?

A PPI refund scam is like a trick where scammers contact people and say they are owed money for a PPI they were wrongly sold. They make it sound real, but it’s just a way to steal money scammers might act like they’re from legit places like the FCA the Ombudsman, or even a law firm to make you believe their lies.

Victims are often told that they have a pending huge refund amount. However, the victim is advised they will have to pay a ‘processing fee’ in order to receive any money. In most cases, once the money is transferred, the scammer will disappear, leaving the victims out of pocket.

How Do PPI Refund Scams Work?

A Scammer will usually start the conversation either through a cold call, email, text message, or social media. They may present themselves as representatives of the FCA, or from a reputable firm and promise that the recipient is due a notable PPI repayment.

In order to gain the trust of the victim, they may send official-looking documents that seek to mimic those from a genuine financial institution.

Some victims fall into traps after filling out online forms for financial services, mistakenly giving their identification to a scammer, as a result, can cause issues similar to those aforementioned.

After gaining the trust of and then convincing the victim that they should get a refund, a fraudster will ask you to pay an advance amount, which as aforementioned is how this scam functions.

Afterward, the fraudster will claim that these ‘advance charges’ are for tax clearance fees, legal fees, or processing fees. In some cases, a scammer may persuade victims to take out an insurance policy instead of paying the money directly.

In order to make the transaction untraceable, they will ask you to pay either through iTunes or a pay-safe card which can include, a gift card, bank transfer, or other money transfer services like Western Union.

If the victim transfers any money, the scammer will keep requesting more funds. They might ask for additional fees or say that they’re getting some errors for which the victim has to pay.

This strategy will be repeated until the victim realizes that this has been a scam; usually, at this point, the victim will have lost a huge amount of money.

How do you Identify a Fake PPI Refund Offer?

Scammers will use pressure tactics and present themselves as a reputable firm and as a result, a victim can then be scammed.

An important sign that this may be a scam is getting an unexpected message or call about a PPI refund, particularly when this was not applied for. Financial institutions do not contact individuals unannounced regarding compensation. If they ask you to pay advance charges, it therefore has a high probability of being a scam. A genuine organization will never ask you to pay them a sudden amount before providing its services.

In order to check the credibility of a firm, always check the Financial Services Register on the FCA website to then verify whether a company is authentic. If the company is not listed, it is likely a scam; another major red flag is the use of urgency and high-pressure tactics.

In most cases, scammers will make mistakes such as building fake websites. These usually contain spelling and/or grammatical errors.

Always double-check email addresses or website URLs even if the email or letter looks legitimate. Scammers will often create websites that seek to be authentic and imitate legitimate ones.

How to Protect Yourself from PPI Refund Scams

To prevent you from falling victim to such scams, never share your personal, banking, or financial information with anyone who contacts you unexpectedly about a PPI refund.

If you believe that you are entitled to get compensation, then always contact the Financial Ombudsman Service or your bank directly through their official channels.

Before dealing with any claims management company, confirm its authenticity by checking the FCA registration. If the firm is not registered then you must stay away from them as they could be scammers.

The best way to stay away from a scam is to avoid cold calls, especially those that seem suspicious. Financial institutions do not contact individuals randomly and offer refunds. If you get an unexpected call the best way to deal with the situation is to end the conversation immediately.

What to Do If You Have Been Targeted by a PPI Scam

If you think someone has tried to scam you or already has then speak to the police or fraud services so they can take action and help you.

You must first ring up your bank and let them know you’ve been scammed. They can reverse the transaction or block further payments to the scammer.

It is also advised that you report the scam to Action Fraud UK, which is the UK’s national fraud reporting center. You can do this online through their official website or by calling their helpline.

If a scammer claims that they are from reputable firms like FCA or Financial Ombudsman, then report it directly to these organizations. They may be able to take action against it and can save other people from falling into this scam.

If you have shared your personal information with the scammers, then check your bank statements for any strange activities such as transfers you didn’t authorize. If you have given out your login information, you should immediately change your password or contact your bank and ask for new information.

Apart from this, you can check your credit report, sometimes it helps in finding the potential identity theft. If you feel like someone has compromised your personal information, then you can contact Cifas or another fraud prevention organization, the UK’s fraud prevention services can add extra security to your credit report.

Written By – Duncan Paul Glasgow