What is cybercrime?

Becoming a victim of cyber scams can seriously impact your financial health – and sometimes, as a result, your mental health. Financial fraud can carry a stigma that may trigger feelings of shame and embarrassment for victims, some of whom may never have all their losses reimbursed.

Thankfully, awareness of financial fraud is growing, and there are more tools and resources available to help protect ourselves against cybercrime. Even so, it’s up to all of us to stay informed and shield ourselves from this ever-evolving threat.

In this guide, we’ll explain what cybercrime is, what it can look like, and how fraud can impact your credit and finances. We’ll also cover how to prevent financial fraud with key steps to remember, including how to report cybercrime in the UK.

In this guide:

• What is cybercrime?
• Types of cybercrime
• How to prevent cybercrime
• How can cyber scams impact your credit report?
• Do banks refund scammed money in the UK?
• How to report financial cybercrime

What is cybercrime?

Cybercrime is criminal activity that either targets or uses a computer or network-connected device to commit crimes against people. Most cybercrime is used by criminals who are trying to steal money, make a political statement or attack someone personally. Cyber criminals can be highly technically skilled and organised, while others may be novices using basic hacking skills.

Types of cybercrime

Some of the most common types of cyber scams include:

• Email and internet fraud
• Identity fraud (where personal information is stolen and used)
• Theft of financial or card payment data
• Theft and sale of corporate data
• Cyberextortion (demanding money to prevent a threatened attack)
• Ransomware attacks (a type of cyberextortion)
• Cryptojacking (where hackers mine cryptocurrency using resources they do not own)
• Cyberespionage (where hackers access government or company data)
• Interfering with systems in a way that compromises a network
• Infringing copyright
• Illegal gambling
• Selling illegal items online
• Soliciting, producing, or possessing child pornography

How to prevent cybercrime

Read our tips for how to look out for and respond to cyber scams and financial fraud below.

1. Never trust unsolicited calls or emails asking for your details

This is, perhaps, the most important piece of advice you can follow. Most people don’t want to be confrontational – even when on the receiving end of an unsolicited call from a ‘bank’.

• Legitimate financial organisations will ask for further verification before you give out your details: In fact, they should never ask for your account details or personal information without providing proof that they are who they say they are.
• Scammers can replicate genuine telephone numbers: Even if the number matches that of your bank, a direct lender or HMRC, cyber criminals can imitate, or ‘spoof’, real phone numbers of financial organisations to appear like a genuine source.
• Call the business yourself to verify: If your bank, HMRC, your direct lender, or anyone else calls you and asks you for your information, tell them you’ll call the business yourself. After you find their contact details from a reliable source, you can give these details over once you’ve verified that the request is legitimate.

Fraudsters may try to panic you by claiming that you’ve already been scammed or are currently being attacked. Posing as your bank, they might tell you to transfer money into a ‘safe account’ while they resolve the issue, when in fact, you’ll be transferring funds directly to the scammers.

This is known as an authorised push payment (APP) scam. Remember to stay calm and verify the caller by ending the call and calling the business directly yourself.

2. Treat email links with caution

Phishing emails are a common form of financial fraud and cybercrime, as most of us know. These emails appear to be from banks and other financial institutions and ask you to confirm your account details, card details or other personal information. This is often via a clickable link that takes you through to a page asking you to insert your details.

Again, this will often appear to look like it’s genuinely from your bank. It could also appear to be an email from a common delivery company, asking you to pay for a ‘missed delivery’.

Watch out for this type of fraud and always stop to question the source of an email if it’s asking you to confirm your account information, as genuine consumer emails from financial institutions won’t do this.

For more information on how to recognise phishing scams, the National Cyber Security Centre offers official guidance for email and text phishing.

3. Be wary of text scams

Clickable links can also be sent by text, so it’s important to be wary of these too.

• Cyber criminals will often pose as a person or an organisation you trust. They’ll typically send a convincing message with a link through to a scam website.
• Once you’ve clicked the link, you’ll then be asked to submit your personal and financial details.
• They may use tactics such as urgency (suggesting that you have a limited time to respond) or they may threaten you with negative consequences.

4. Make sure you’re aware of the latest scams

Scammers like to take advantage of consumer vulnerabilities. This means they’ll target consumers where they feel most vulnerable. Examples include emails or calls that offer discounts on energy bills, and phishing campaigns that claim to have an undelivered parcel for you to collect.

These scams are ruthless and prey on those who may have their guard down due to vulnerability. As a consumer, you should always keep up to date with the latest cyber scams. You can research current financial cybercrime scams by visiting Action Fraud and BBC News Internet fraud.

5. Get smart with your passwords

According to the Institution of Engineering and Technology (IET), a fifth of people (20%) use the same password across more than one website or device. Meanwhile, up to 41% of people use passwords that include a significant date or pet’s name. What’s more, four in 10 people (41%) claim that they wouldn’t know how to respond if they were a victim of financial cybercrime.

But it’s never been easier to generate and store passwords securely on your devices, and doing so can go a long way in protecting you against hacks and data breaches.

Opting into multi-factor authentication can help protect your accounts, while long passwords are even better than complex ones when it comes to security.

Read our guide for more insights on strong password practices and what makes a healthy password.

6. Use two-factor authentication (2FA)

Two-factor authentication (2FA), or multiple-factor authentication (MFA), puts an extra level of security between you and potential cyber scams. This involves a password and an extra verification method. This often includes sharing a unique code to input after your password, which you can often receive by:

• Authenticator apps
• Push notifications
• Text and email verifications
• Biometric authentication (such as voice, fingerprint or facial recognition)

You can (and should) add 2FA to bank and PayPal accounts, as well as your email and social media accounts.

Cyber criminals may still pose as your bank, direct lender or a financial organisation and ask you to share these unique authentication codes – but you must never share them. Legitimate financial organisations will never ask you to share codes generated by a secure key or authentication log in.

7. Keep your software updated

Many of the updates happening behind the scenes on the software you use every day helps to protect users against cybercrime and fraud. Developers work tirelessly to help protect data and make their software more robust, but they rely on you to actually update to the latest versions when they’re available.

Fraudsters will always look for a weak spot, and this applies to software. So, turn on automatic updates and minimise your chances of being targeted.

8. Regularly check your credit report

It’s important to regularly check your credit report and identify any transactions you don’t recognise. If you spot anything suspicious, contact the relevant credit reference agency and the associated bank, lender or financial organisation to report it.

You can check your credit report for free at any of the main credit reference agencies (CRAs):

• Experian
• Equifax
• TransUnion

You can also add a Notice of Correction password to your credit report for added security. At your request, CRAs like Equifax and Experian can put a note on your credit report stating that any future credit applications must be authorised with a password of your choice. That way, future credit agreements can’t progress until you confirm that it’s legitimate.

How can cyber scams impact your credit report?

Financial fraud and identity theft can seriously impact your credit report if they apply for credit accounts in your name.

• Credit applications leave a hard footprint: Any credit applications, whether they’re accepted or rejected, will be recorded on your profile until you flag and report it as fraudulent.
• Missed payments will negatively impact your credit score: If a scammer successfully applies for credit in your name, any missed repayments will damage your credit report until resolved. Learn more about the impact of missed repayments with our guide to how long missed payments stay on your credit report.
• Cyber scams could impact genuine credit applications if left unnoticed: While you can often resolve legitimate fraud attempts and remove them from your profile, it could cause your credit score to drop temporarily. If you’re in the middle of an important credit application, such as applying for a mortgage or car finance, this could complicate the process.

Do banks refund scammed money in the UK?

Getting money back after being a victim of financial fraud and cybercrime can be challenging, but it’s possible. As of October 2024, banks and payment providers must reimburse you if you’ve been a victim of an APP scam – where a cyber scam has tricked you into making a bank transfer out of your account.

UK banks must refund scammed money within five days. However, your money is only protected up to £85,000 per claim. If your case is complex and your bank needs extra time to investigate, it could take up to 35 days to refund money.

How to report financial cybercrime

If you’ve been a victim of financial fraud or cybercrime, be sure to follow these steps:

1. Contact the bank, lender or financial organisation: Contact your bank, lender or card issuer as soon as possible and let them know you’ve suffered from a cyber scam. They can freeze accounts and start to investigate the activity.
2. Report the attack: You can report any financial cyber scams to Action Fraud online or call them at 0300 123 2040 (Monday to Friday, 8am to 8pm).
3. Contact credit reference agencies: Contact the main CRAs to report and dispute fraudulent activity and start repairing your credit profile.

We’re here to help

Unfortunately, cybercrime and financial fraud aren’t going away. But the best defence you, as a consumer, can have against these criminals is to keep up to date on their latest tactics and protect your accounts from potential cyber scams.

There’s no reason to take a risk if an email or call just doesn't seem right. And even if a request for your account details doesn’t seem suspicious, it’s often best to check with your providers anyway.

As a responsible direct lender, we conduct thorough verification and eligibility checks to make sure potential borrowers can afford our short-term loans. As part of this process, we’ll complete fraud prevention checks to detect suspicious applications made under your name.

Discover more insights and guidance on our Moneyboat blog, from how to avoid payday loan scams to our open banking guide .

If you ever find yourself struggling to keep up with priority bills and repayments, don’t hesitate to reach out for expert guidance. Free, independent support is always available from third-party help organisations such as MoneyHelper, Citizens Advice and  StepChange.