Rise in Financial Scams
In this year of uncertainty, we urge all investors and savers to be extra vigilant when taking action to invest, save or move pension funds. Be suspicious of everyone. Be particularly wary if someone contacts you out of the blue, you receive odd requests for payments, or offers that sound too good to be true, even if they purport to be from your own bank. Scammers now have the technology to hijack legitimate contact numbers from your bank or pension provider in order to make it look as if they are calling from that number. For more on how to spot scams visit https://www.fca.org.uk/scamsmart/.
Particular care and vigilance should be taken whilst researching online, as highlighted below, there is a growing trend in fake financial websites and financial products. Always use the FCA online register to check the validity of a firm you are considering approaching, https://register.fca.org.uk/.
Huge Recent Spike in Online Financial Scams
According to the latest figures from the Investment Association* the number of reported investment scams has almost quadrupled since July this year with approximately 1,175 reported incidents (12.10.2020), up from around 300 since Investment Association’s last warning in July. More than 200 people have been affected with estimated losses to savers from these scams more than doubling from approximately £4m in July to £9.4m in October.
Chris Cummings, Investment Association chief executive explains:
“The scams clone genuine investment management firms through impersonated products, websites and documentation, and then promote the fake products through fake price comparison websites and adverts on social media and search engines.”
Similar Quilter investigations** revealed the same growing trend in brand impersonation or association scams where, as Matt Burton, Chief Risk Officer at Quilter warns:
“The scammers are based outside the UK and once the money has changed hands, the prospect of recovering any money is extremely low. Once more, the victims often do not realise the money has gone until months potentially years after the cash is handed over.”
Whilst the investment management industry is working closely with police and regulators to put a stop to these scams, this won’t happen overnight.