Don’t get caught by these three scams

"It couldn't happen to me" is one of the most dangerous phrases in finance. We all think we will never fall for a scam, yet millions of us do, according to the Financial Services Authority (FSA). And while hopefully no one is still replying to the badly written emails from Nigeria advising them of how they can claim their share of Saddam's missing millions, there are plenty more-credible ruses out there designed to part you from your money. Here are three of the most common current scams to watch out for.

1. The advance fee fraud. The principle is simple you are persuaded to send money up front, which you then never see again. A recent scam flagged by the FSA claimed you had won a 2012 Coca-Cola competition and the somewhat unlikely action required to get a prize was to contact the FSA and pay an administration fee.

Other scams involve fraudsters claiming you are entitled to insurance compensation, an HMRC tax rebate or, more recently, a child benefit supplement.

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The trick is the same in all cases you are asked to either contact a fake website or phone a scam number and hand over a fee or deposit. To avoid this one, follow a simple rule of thumb never give away personal details unless you are 100% sure about the person or site you are dealing with. For some specific tips on what to look and listen out for, try www.getsafeonline.org

2. Tempting texts. In these frauds you receive a text message saying you are entitled to a plausibly precise sum. The reason given is that you are due payment protection insurance (PPI) mis-selling compensation. To claim it you must phone the number given. If you do so, you are duly routed to a hugely expensive premium rate line.

And if you think all you need to do is text "STOP" to prevent further messages arriving, be careful. You may just encourage the scamming service to bombard you with further texts.

In some cases the PPI text is designed to get you to contact a bona fide specialist claims firm but don't bother. Claiming PPI isn't hard (you can download a form at www.financial-ombudsman.org.uk), yet these firms will often take 25% of the amount you are entitled to as a fee. My advice? Ignore all PPI-related cold calls and texts.

3. The boiler room' scam. Boiler room' victims are persuaded to buy illiquid shares through a broker' and told they could make big profits. No such profits ever materialise as you commit more and more money to the scheme. The latest twist involves property schemes that promise a big pay off; in reality you are suckered into buying at a hugely inflated price.

So my two final tips are: first, check the identity of any firm you deal with at the FSA (tel: 0845-606 1234); and second, assume that something that looks too good to be true is just that.