I’ve written before about how to avoid financial fraudsters and, in particular, not falling foul of pension scams. One would like to think that, in this time of increased community spirit and kindness, scams are not something that we would need to worry about. However, recent reports have shown that, on the contrary, financial scams of all kinds have risen sharply since the Coronavirus outbreak.
Earlier this month, the Financial Conduct Authority (FCA) and the Money and Pensions Service (MaPS) issued a joint statement urging consumers not to make rash decisions, or hasty changes to their financial arrangements, as fraudsters prey on uncertainty surrounding recent market volatility to trick victims out of their savings.
This comes at the same time as the City of London Police reported a 400 per cent increase in COVID-19 related fraud in a month.
What should you be looking out for and how can you protect yourself against financial fraud?
Pensions and investments
Pension and investment fraud often comes in the form of an unsolicited approach by telephone, text, email or social media. The fraudsters are skilled, friendly and appear to have all the answers
The fraudulent schemes may take many forms, from “early access” pension schemes aimed at those struggling to make ends meet financially, to investment-based scams targeting investors with little income, through to pension schemes offering the victims far higher returns than they are currently receiving on their pension investments and appealing to one of our most basic instincts: greed.
The good news is that, last year, a complete ban on pension cold-calling was introduced. Firms that break the rules could face penalties of up to half a million pounds, so you know that any unsolicited caller trying to discuss pensions can rightfully be given short shrift.
You can also make a few other checks:
- Only take advice from a financial adviser who is on the FCA’s register of authorised firms. It’s easy to check if someone is authorised – visit the FCA financial services register and enter the firm’s name. The organisation should be clearly marked as “Authorised”, which means they have permission to provide regulated products and services. As an example, take a look at our entry for Omnium Wealth here.
- In addition, do some research, talk to others (not the bloke you just met in the pub), or read reviews, to gain a second opinion from someone qualified to give it, who has used the organisation previously.
You can also check out the FCA's ScamSmart website, which provides further tips for avoiding scams.
Other financial fraud
Scammers are out to take your cash any way they can, so always be on the look out for anything that doesn’t feel right.
UK Finance, the banking industry group, warned consumers recently to look out for so-called “smishing” scams. These are text messages sent by criminals that purport to be from a trusted organisation, such as a bank, aiming to trick people into giving away money, or sensitive personal information.
A further variant on these is “spoofing” – fraudulent text messages that appear in a genuine string of existing text messages, again trying to fool the recipient into parting with cash or sensitive data.
These join already well-documented “phishing” scams - fraudulent requests made by email. For example, you could receive an email that appears to be from HMRC, informing you of a tax rebate you didn’t know you were due. There will be a request for your debit or credit card details, including a pin number, in order that the refund can be issued. However, if you comply, you will simply be providing the fraudsters with your payment details.
HMRC don’t work in this way but, moreover, no honest organisation will ask for any of your personal security data, such as passwords and pin numbers.
The City of London Police has also received reports of COVID-19 themed phishing emails, that attempt to entice users into opening attachments containing malicious content that could lead to fraudsters stealing personal information, email logins, passwords and banking details.
For more tips and advice on avoiding falling prey to financial scams, visit the TakeFive website here.
Don’t be pressured into making any hasty decisions; no reputable organisation will mind you taking your time or making additional checks that everything is above board – only criminals will try to pressure you or panic you.
Don’t give out sensitive personal data, passwords or pin numbers – honest organisations will never ask you for these.
And, finally, apply good old common sense; the old adage that says “If it seems too good to be true, it probably is”, has always worked for me and I commend this timeless wisdom to anyone tempted by unexpected, and unexpectedly generous, financial promises.
Get in touch
If you would like to discuss your financial circumstances and how Omnium Wealth can help, give me a call today on 01483 205890.
If you think you’ve fallen for a scam, contact your bank immediately and report it to Action Fraud.