As an expat, it’s easy to feel overwhelmed when dealing with official business like taxes, mortgages, and insurance when you move to another country, but letting down your guard could make you more susceptible to scams. One British expat recently lost €400,000 in life savings after being scammed in Spain, demonstrating the need to be extra vigilant when you deal with officials and hand over sensitive information such as your bank details or passport.
Below, we’ve rounded up some of the most common expat scams to be aware of, but first, here are a few tips on protecting yourself and your family from scammers, wherever you are.
One of the most common expat scams involves pensions, with fraudsters claiming they can help you access your pension pot early or avoid taxes and penalties. Anyone can fall victim to pension scammers, so it’s important that you’re on the lookout for common warning signs.
Most scammers persuade pension savers to transfer their pension pot or release funds from a pension and make investments in high-risk opportunities such as renewable energy bonds, parking, or property and hotels overseas. These opportunities are pitched as “high reward, low risk,” but more often than not, they’re the opposite. Other scammers claim that savers can access their pension pot early through ‘loopholes’ in the system, but this could lead to them losing money or facing high tax bills from HMRC should they withdraw a pension early.
Worried about a pension scheme as an expat? If it sounds too good to be true, it probably is. Speak to an independent, qualified and licensed financial adviser and avoid unsolicited calls or emails about pensions. If you do come into contact with someone suspicious, report them.
Scammers often target expats, who they assume to be retired with a comfortable savings pot, and introduce them to investment opportunities that can pay dividends. The truth is that a lot of investment scams are not scams as such, but instead expensive products that are either missold or inappropriately recommended, as the agents are actually salespeople who receive a generous commission for every client they refer. From Ponzi schemes (where old investors generate returns based on money from new investors) to “alternative investments” in up-and-coming industries like fine wine and car parking, there are lots of ways that you could be convinced to part with your cash. Although there are some genuine opportunities if you have the right financial advice, it’s best to be sceptical and err on the side of caution.
Do your due diligence before you make any investments, get a second opinion if you’re on the fence, and don’t invest in anything that you don’t understand. You should also walk away from any high-pressure sales pitches - take time to reflect and weigh up your options - and use your head, not your heart. The last thing you want to do is lose out on your life savings.
Though money transfer schemes have become something of a meme these days, with foreign princes promising to transfer you millions of dollars in exchange for your help, the truth is that some scammers are getting more sophisticated and can manipulate even the savviest amongst us. If you’re contacted by someone claiming to be a government official or individual needing help transferring money, you’re likely being targeted by a scammer.
Such scams involve you transferring money to a business or individual, with the promise that you’ll be refunded - and rewarded - for the inconvenience. But it’s not pie-in-the-sky emails promising thousands of dollars you need to worry about - it’s scams from everyday folk who say they need help. It could even be a fellow expat claiming they need help transferring funds to their family back home in the UK - say no if you’re not 100% confident of their intentions and, again, report any fraudsters to local authorities to help protect other people.
Scammers are increasingly appealing to peoples’ good nature by asking them to donate to charities, often pulling at the heartstrings with emotional stories or images. However, they’re not always what they seem. In many countries, charities don’t face the same strict scrutiny on fundraising or accounting as they do in the UK, so you could be donating to a scammer.
If you are contacted and asked to donate to a charitable cause, you should be vigilant and ensure that money is going to a registered charity, rather than straight into a fraudster’s pocket. Hang up on any unsolicited calls and refuse cold callers at your property. If you do want to donate, do your research and make sure that it’s a legitimate cause before handing over any your money. Pay in cash where possible, rather than handing over bank details.
It’s natural to be concerned about the ongoing coronavirus pandemic - after all, we’d do anything to protect our loved ones from harm. However, some scammers are using the current situation as an opportunity to target vulnerable people, including expats. If you’re approached and offered access to a COVID-19 antibody test or vaccine, say no, and only take advice and medication from trusted local sources like the government and your doctor.
Have you fallen victim to any of these expat scams? Do you know about other ways fraudsters are targeting vulnerable expats? Join in the conversation with fellow expatriates on Twitter, and check back to the Money Saving Expat blog soon for more information.
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