Think it won’t happen to you? Tim Bennett highlights the latest ways investors are being scammed and introduces the FCA scam-awareness campaign.
Why investors should be Scam-smart
The FCA is launching a new campaign aimed at making investors aware of the risk of being scammed and to highlight a new online resource. Here is a summary of the key components and you can find out more at scamsmart.fca.org.uk.
“It won’t happen to me”
We all think we will never be daft enough to be caught out by a scam. However, the reality is rather different;
The average loss from a financial scam currently runs at £32,000 so it’s little wonder the FCA are keen to cut down the risk.
How do scammers do it?
All of us are vulnerable to someone offering a seemingly free lunch and that is what scammers prey on. Using charm and slick patter they will often claim that they are offering something few other people know about (the “secret deal”) and/or that other people have profited from already (“social proof”). A time deadline adds to the allure and of course they will make sure they are offering an above-market return, perhaps in the form of a high yield.
The FCA response
The best defence against scammers is common sense;
Many of us don’t take a second opinion before investing and still more of us fail to do basic checks on firms and advisers. Worse we can be all too ready to respond to an unsolicited approach whether by phone, email or letter.
A new tool
As part of its campaign the FCA has devised a clever new tool called its warning list. Essentially this is a web page where you can check the credibility of any investment you are offered.
Although many of the latest scams involve pensions, as fraudsters try to exploit the relatively recent changes to the rules, you should watch out for any of the products mentioned below too;
Remarkably, it seems that we put more time into checking holidays and cars than we do financial products yet many of us will spent far more on the latter!
A timeless piece of advice
Like the FCA, I will leave the last word on this topic to Nick Hewer (Businessman and Apprentice judge);