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Village Features

Protecting yourself from financial fraud

Posted on May 29 2018 at 12:30:10

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Martin Pryor warns against some new trends in investment scams.

The world’s ever-increasing connectivity brings with it many financial conveniences. But with this convenience comes risk and the unwary internet user can become a prime target for scammers, looking to get their hands on quick funds while never having to leave wherever they conduct their dubious work.

We’ve all seen the spam emails claiming to be from deposed foreign royalty looking to disperse their wealth in a hurry – and we’ve all wondered wryly who in their right mind could fall for such an obvious scam.

But the dangerous scams are the ones you don’t see coming, and anyone can fall victim to fraud without realising until it’s too late.

In its in-depth Financial Lives survey published last year, the Financial Conduct Authority (FCA) surveyed almost 13,000 people on the ins and outs of their financial situation.

It included a large representative sample who were asked about their experience of attempted – and successful – fraud.

The FCA found that around one in 500 UK individuals ended up sending money to fraudsters. This works out at an estimated 250 people every day.

Even though the vast majority of people who are contacted do not end up sending money, it only takes a few to make the fraudsters’ work pay.

This is especially the case for investment fraud, with Action Fraud reporting an average loss of £32,000. Recent pension freedoms and low interest rates offering poor returns on savings are providing further opportunities for fraudsters.

One of the most common methods used by investment fraudsters is to pressure potential investors to make a quick decision on a time-limited investment offer. But scammers are constantly evolving, so how do you stay one step ahead?

Scammers’ methods
Scammers toil endlessly to refine their tactics, but there are some red flags that should alert you to the possibility that what you’re hearing is a potential scam.

Some of the methods scammers use include:

* Promising high returns for little risk

*  Fake reviews and testimonials on their site to lend an air of authenticity

*  Pressure tactics, like telling a potential victim they must make a decision right away or lose the l opportunity

*  Flattery, such as telling a potential victim they are a savvy investor

*  Posing as a legitimate firm, perhaps saying its information on the FCA’s Register is incomplete and giving you different contact details

*  Fake non-disclosure clauses to scare victims out of telling others about their investments – for example asking someone they trust if it looks dubious

* Implying a lot of other people want in on the opportunity or have invested

What can you do?
Be extremely wary if you are contacted out of the blue – if you’re cold-called, simply hang up. Legitimate investment companies will almost never cold-call you.

Only deal with financial services firms that are regulated by the FCA – you can use the Financial Services Register on the FCA website to check the status of a firm.

Always access the Register from the FCA website, rather than through links in emails or on the website of a firm offering you an investment.

And double-check the contact details you have been given are the same as on the FCA Register in case the firm has been cloned.

Visit http://www.fca.org.uk/scamsmart to find out more about how to protect yourself from investment scams.

From there you can also check the FCA’s warning list to find out more about the risks associated with an investment and check a list of firms known to be operating without FCA authorisation.

Finally, strongly consider taking professional financial advice from an FCA-authorised financial adviser – not the stranger claiming to be an adviser on the other end of the phone. The FCA’s Register lists the details of all authorised firms.


Pryor Portfolio Management is a registered independent financial advice firm. Its FCA number is 511176.

* Contact Pryor Portfolio for more information and advice.
Tel: 07961 162818
.(JavaScript must be enabled to view this email address)
http://www.ppm-ifa.co.uk


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