19 January 2024
There has been no let up in the determination and sophistication of fraudsters’ efforts to steal and swindle from the innocent and vulnerable members of society.
With the number of scams on the rise and the sophistication of these criminals ever increasing we take a look how best to educate and protect yourself.
A good place to start with understanding the various types of scams is the www.moneyhelper.org.uk website.
The website lists and explains 14 types of scams and other fraudulent schemes to help raise awareness and empower consumers.
It goes into detail on warning signs and what to do if you fall victim to a scam, or identity theft or having money stolen from your bank account.
There is also excellent information on pensions scams. Since 2015 when it became possible for pensioners to withdraw 25% of the capital from their pensions early – there has been significant growth in fraudulent activity.
According to the FCA and the Pensions Regulator, victims of pensions scams lose an average of £51,000.
There is a list of tell-tale signs that the website says should alert people:-
The Financial Conduct Authority has helpfully provided a Scam Smart Warning list where it is possible to retrieve detailed information and advice on likely scams. There is a list of firms on a Warning List that uses detailed filters to provide tailored advice for users.
https://www.fca.org.uk/scamsmart/warning-list
The FCA Warning List using a Step by Step series of questions gets users to focus on the type of proposal they have received whilst also providing clear cut advice on the issues involved.
The website will tell you when a proposed investment activity for example carbon credits is not regulated by the FCA.
The website will also tell you which companies are currently ‘blacklisted’ i.e. those engaged in fraudulent activity.
You should treat the offer with extreme caution if there’s:
A beginner’s guide to scams | MoneyHelper
It means, at the consumer end, staying alert to people promising something ‘too good to be true’.
‘Action Fraud’ is the UK’s national reporting centre for fraud and cybercrime where scams get reported.
It has a wealth of information on the types of fraud, prevention and a newsroom.
Using the Action Fraud contact number :0300 123 2040 ; callers can speak to fraud and cybercrime specialists for support and guidance.
Action Fraud does not however investigate fraud cases however it does publicise them. Reports to Action Fraud are considered for assessment or referral to the police. Callers receive a police crime reference number and their cases are passed to the National Fraud Intelligence Bureau.
Fraudsters have now employed a new tactic- that is remarkably simple to set up. Using the veneer of stolen company logos, on what appears to be letterhead, fraudsters are using financial parlance, old bond term sheets, to draw on investors hunger for high interest rates.
In another case of direct marketing, the fraud involves emailing three documents i) a Terms & Conditions sheet known as a “term sheet” ii) a Fact sheet that details the bond security and iii) a client application form that each carry the bank and Financial Authority logos.
The hook is usually a very high annual interest rate the fraudster advertises the bond as carrying. In one case we saw fraudsters advertising a bond from a major US financial institution paying over 15% interest.
Often the fraudsters are advertising a high yield bond from a well-known financial institution or a large UK company.
It is often the case that the bond does in fact exist, but it was issued many years ago and are not offering now a yield, similar to the coupon rate.
Often the financial institution uses ‘clone firm’ details i.e. names that use a leading bank’s name with very small modifications, that are designed to scam and mislead people.
The unsuspecting recipient of this emailed offer is asked to fill out a client application form setting up an account alongside full details for how to apply for these bonds i.e. where to send their cheques or bank transfers.
The fraudsters are using email addresses (some set up a matter of days before) and telephone hotlines that are in some cases already known to police, and Financial Conduct Authority as having been linked to scams.
These targeted financial bond offers are designed to be highly attractive to those looking for safe high income financial products. However any money sent / bonds applied for- this money will vanish and amount to a total loss.
However this fails the major test of ‘too good to be true’. This is a SCAM.
It is possible to report a scam direct to the FCA using the link below. The FCA team will take the details of the scam and provide guidance on the next step.
www.fca.org.uk/consumers/report-scam
Fraud is morphing once again, employing new tactics, new jargon, new methods. But your financial adviser is here to help uncover these disgraceful scammers. If you receive something like this, let us know. Do not commit to anything from someone who has approached you without having first obtained your consent to do so. Do not commit to anything ‘too good to be true’. And above all, remain vigilant.