3 serious financial scams to avoid

16th March 2021

Multiple lockdowns and restrictions on movement have been tough on our physical and mental health. Even people previously “doing okay” have found themselves struggling over the past 12 months, and these feelings can leave you vulnerable to scams.

Scammers have defrauded Brits out of millions of pounds in the last year, using ever more sophisticated techniques to encourage you to part with your personal details and money.

With scams on the rise, here are three common scams to look out for.

1. Pension scams

Last year, the Financial Conduct Authority (FCA) and The Pensions Regulator reported that a total of £30,857,329 has been lost to pension scammers since 2017.

The latest FCA review highlighted the effects of pension scams for consumers. It said: “When a consumer falls victim to a pension scam or money from their pension ends up in investments that are not appropriate for them, their losses can be devastating.”

New research reveals that it’s the “baby boomer” generation that are most at risk as scammers target billions of pounds in retirement savings.

The regulator’s extensive Financial Lives report reveals that almost a quarter (23%) of 55 to 74 year-olds received unsolicited approaches in the 12 months to October 2020. These mainly constituted:

Stephen Lowe, group communications director at Just Group who carried out the research, said: “There is an epidemic of scam activity because fraudsters have worked out that the pensions of the baby boom generation are rich pickings, and some unsuspecting savers are open to ideas about how best to take and use that money.

“Promising quick access to cash lump sums or high returns on investments is an easy way to get people’s attention – and ultimately their cash.”

As with all scams, the key advice is to look out for common signs that things are not as they seem. A call out of the blue is often a sign that it’s a scam, so check whether any company is on the Financial Conduct Authority register.

Promises of unlocking your pension early, guaranteed returns, or high-performing investments are also common red flags.

2. Investment scams

Last March, the Bank of England cut interest rates to a record low of just 0.1%. This has meant that millions of savers are receiving negligible returns on their cash, a difficult situation amplified by the economic impact of the pandemic.

These factors have pushed many people who wouldn’t ordinarily consider investing into considering ways to get a better rate of return.

Action Fraud say that, between September 2019 and September 2020, they received more than 17,000 reports of investment fraud. This amounted to £657.4 million in reported losses – a 28% increase when compared to the same period the year before.

So-called “clone firms” imitate genuine investment firms to trick people into investing in investments that don’t exist. And fraudsters are becoming more sophisticated in how they target people, so it can be harder for you to spot a scam.

While consumers are generally aware that being contacted out of the blue is often a scam, fraudsters are now giving people a few days to think about their investment and do their own research.

Fraudsters often:

If you use a company online for the first time, always look for a physical address on its website or a phone number and call them if necessary. If there is poor English or grammar, this could be a scam run from overseas. Also look for a privacy policy and company history on the site and look up the firm on the FCA register.

If you’re still not sure, talk to a financial planner who will be able to investigate whether the firm (and investment) is legitimate.

3. Vaccine scams

In the last few weeks, vaccine scams are spreading as fast as the new Covid-19 variants. Police forces have urged consumers to be on their guard – especially those awaiting their first dose of the vaccine.

Under this scam, you may receive a phone call, email or text message containing a link to a fake NHS website. When you visit the site, you’ll be asked to complete an application form to register for the vaccine and for various personal and bank details which are then used by criminals.

You won’t need to provide any financial details to book your vaccine appointment, and neither will you have to pay.

Get in touch

If you have been contacted about your pension or investments, it pays to speak to a professional before making any decisions. We can help you determine whether the offers are legitimate, and provide regulated, high quality advice.

Please get in touch by email info@depledgeswm.com or call (0161) 8080200.

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