Irrespective of the impact of factors such as Brexit on emigration, the number of Brits moving abroad over the past five years has remained stable, with the latest figures (year ending March 2020) from the ONS revealing over 400,00 people left the UK for life overseas, says Christopher Nye.
However, while creating a new life abroad, for work, family or retirement, many expats fall victim to sophisticated scammers who specifically target foreign residents.
In light of this, here are five scams expats should watch out for, including:
• Property
• Visa
• Investment
• Pension
• Money Transfer
Expatriates are a prime target for scammers. And no wonder, usually being wealthier than locals, out of their comfort zone and maybe with only have a shaky grasp of the language and local financial procedures.
As anyone who's ever moved abroad will know, to start out you'll tend to take a few things on trust as you learn local customs and make friends.
You'll wish to avoid upsetting local people by appearing too suspicious. You're cut off from your own support network.
So what in particular should you watch out for?
Here are the five typical scams that expats should watch out for:
Property scams
Property buying abroad used to have a distinctly Wild West feel to it, as British retirees and holiday homebuyers bought time-shares from friendly fellow-Brits who approached them on a Costa del Sol prom. Dodgy developers sold apartments on land they'd already mortgaged, country homes were built without planning permission, or granted by corrupt officials.
Since the global financial crisis, authorities have cleaned up their act and property buyers wised up to the need to use an independent lawyer, (rather than the estate agent's brother-in-law).
The result: property buying abroad should be as safe as in the UK so long as you always use a local, independent, specialist property lawyer and a reputable and experienced international payments specialist.
Visa scams
This is likely to be a growth area for criminals, as Brits get used to applying for visas to retire to EU countries.
The problem is that visas are not just complicated, but even bona fide visa specialists will find legitimate ways around the rules to get you there. In particular, many British people will be investigating the various investor visas and "golden visas", where you buy a property of over €500,000 (€250,000 in some countries) in exchange for gaining residency.
The simplest answer is to see your target country's immigration authorities as a resource, not a gaoler. Most will have websites in English.
Investment scams
With interest rates so low that your savings are making very little, the promise of a return of 10% or more can be tempting. Investors who may have started with a buy to let apartment or two may be tempted by a car park investment, or maybe a bamboo plantation, stamps, fine wine, student "pods"…
But is it real or a scam? In the UK, risky investments would be clearly designated under FCA rules as, for example, Unregulated Collective Investment Schemes. Living abroad, not under FCA rules expats can be at risk.
The golden rule is: if it sounds too good to be true then be very wary (and especially wary if the salesman is driving a Ferrari).
Pensions scams
Is there anything worse than losing your life savings when you're beyond an age to make the losses back? The pension "freedoms" of 2015 allowed you to take 25% of your pension pot tax-free, but has led to many cases of fraud, with an average loss of £82,000, according to the FCA.
Often the first approach will be for a pension "review". What could sound more innocuous? Before long, they're tempting you with riches and returns from overseas schemes. They might be low tax and high reward.
However, soon they'll be getting you to transfer your funds to an offshore account and will be lost to a scammers crypto account.
Money transfer scams
While few expats will fall for advance-fee scams, commonly known as Nigerian Prince scams, asking you to accept millions into your account in return for a cut, there are plenty more sophisticated scams.
Fraudsters will pose as an overseas property buyer's lawyer or notary and ask you to transfer the money to a bogus account - so always double check the bank details with your solicitor.
Reputable and FCA-authorised currency traders are required to follow strict procedures and keep minimum financial reserves.
Other safeguards will include using designated client accounts, so a client's money never even goes into the company's account during the trade. They will also have a strong compliance department, so that fraudsters cannot use the service for money laundering.
By Christopher Nye, Senior Editor at Smart Currency Exchange