Don't Set Scammed!...
Think the Worst!
If you’re contacted out of the blue about a ‘great investment opportunity’, chances are, it’s a high-risk investment or a scam.
Scammers usually cold call but also use email, post, word of mouth or seminars / exhibitions. If you get cold-called, the safest thing to do is hang up. If you get unexpected offers by email or text, it’s best to ignore them.
Register with the Telephone Preference Service and Mailing Preference Service to reduce the number of letters and cold calls you get but we all know this isn’t full proof. Scammers still, somehow, manage to get through.
Callers may pretend they aren’t cold calling by referring to a brochure or email they’ve sent you. That’s why it’s important you know how to spot other warning signs.
Warning Signs
Here’s some clues to help you suss out if someone’s trying to scam you:
Unexpected contact: Traditionally scammers cold call but contact can also come from online sources (email, social media, post, word of mouth, etc.).
Time pressure: They might offer you a bonus or discount if you invest before a set date or they might say the opportunity is only available for a short period.
Social proof: They may share fake reviews and claim other clients have invested or want to take up the deal.
Unrealistic returns: Fraudsters often promise tempting returns that sound too good to be true, however, scammers may also offer smaller, more realistic returns to seem legitimate.
False authority: Using convincing literature and websites, claiming to be regulated, speaking with authority on investment products.
Flattery: Building a friendship with you to lull you into a false sense of security. We all have egos and scammers know all the tricks to win your confidence!
Remote access: They may pretend they want to help you and ask you to download software or an app so they can access to your computer. Don’t do it!
Are They Regulated?
Almost all financial services firms must be authorised by the FCA. If they’re not, it could a scam. Check the FCA register to see if they’re authorised or registered with the FCA.
The FCA have been very pro-active when it comes to scammers. They’ve got a lot of useful stuff on their website and scam-avoidance is a big part of what they do.
I take a lot of pride in my business being regulated by the FCA. Maintaining our regulated status takes effort on my part and I hate the fact that there are firms out there who lie about being regulated.
Always access the FCA register directly from their website, rather than through links in emails or on the website of a firm offering you an investment. Some firms can replicate the FCA website!
Check the ‘firm reference number’ (FRN) and contact details are the same as those on the FCA register. If there are no contact details on the FCA register or if the firm claims they’re out of date, be suspicious.
If you’re dealing with an overseas firm, you should check with the regulator in that country. This can be hard work so probably better to just put the phone down and forget about it!
If you use an unauthorised firm, you won’t have access to the Financial Ombudsman Service (FOS) or the Financial Services Compensation Scheme (FSCS) so, if things go wrong, you’re unlikely to get your money back.
If you use an authorised firm, access to the FOS and the FSCS protection will depend on the investment you’re making and the service the firm is providing.
Not all investments are regulated by the FCA such as wine and fine art. You can find out more about unregulated investment products.
Check it’s Not a ‘Clone Firm’
A common scam is to pretend to be a genuine firm when they aren’t. Always use the contact details on the FCA register, not the details the firm gives you. I have to keep our contact details updated regularly so be wary if they don’t match up.
You could also check the firm’s details with directory enquiries or Companies House to make sure they’re one and the same.
Check the FCA Warning List
Use the FCA Warning List to check the risks of a potential investment. You can also search to see if the firm is known to be operating without FCA authorisation. Even if a firm isn’t on the list, it may still be a scam because firms change names and details all the time. They’re sneaky like that!
Get Impartial Advice
You should seriously consider seeking financial advice or guidance before investing. You should make sure that any firm you deal with is regulated by the FCA and never take investment advice from the company that contacted you, as this may be part of the scam.
I’m sorry to say that more than a few clients have contacted me to tell me about potential scam calls they’ve received but I’m also pleased that they thought to come to me first. In all instances, I’ve told them to ignore the approaches.
If You’re Suspicious, Report it!
You can report the firm or scam to the FCA by contacting their Consumer Helpline by phoning 0800 111 6768 or using their reporting form. Or you can give me a buzz and I’ll give you my take.
If you’ve given your bank account details to a firm you think may be operating a scam, tell your bank immediately.
If you've agreed to transfer your pension and now suspect a scam, contact your pension provider straight away. They may be able to stop a transfer that hasn't taken place yet.
Hope This Helps
The key thing is to be suspicious. Not a great place to start with things but there it is. I’m always here (except Fridays when I do the hoovering!) to chat things through with you if you’re worried.
We all think we’re too savvy to get scammed but, I assure you, we’re not! I know people who’d be considered to be ‘sophisticated’ getting the wool pulled over there eyes. No-one’s immune!
Until next time…