Be investment-scam aware!
09 December 20  /  Insights

The BBC has reported that in recent months as much as £1b in benefit fraud was prevented from being paid to organised-crime groups. They also say that the National Audit Office reports as much as £3b may have been lost through the furlough scheme and around £1.5b has possibly been lost in fraudulent universal credit payments, with claimants whose identities have been stolen facing real hardship, as it can be months before accurate benefits are paid.
 
Whatever the numbers, there is clearly no doubt that incidences of scams, hacking and fraud have been rife during the pandemic, in part due to the increased amounts of Government handouts available and in part to the large numbers of people working from home, using their own computers, with hackers poised to take advantage of the smallest breach in security or lapse in scam awareness.
 
You may think it will never happen to you, but hackers are clever, posing as government bodies, banks, businesses and even friends, leading you to click on a link that can all too easily introduce malware into your system and, at worst, cause you to lose valuable information or money. The stress of being hacked cannot be emphasized enough and the situation can often take a long time to resolve, with some victims never recovering lost funds.
 
Here, we take a look at some of the investment scams that have been occurring, with guidance on how to spot an investment scam and make sure your money, contacts or information do not become compromised.
 
Investment scams

An investment scam is where a criminal uses intense, high pressure sales techniques to convince you to invest in worthless, cloned or non-existent items, such as cryptocurrencies, carbon credits, property, land, gold and wine. In 2018, Action Fraud reveals that consumers lost over £197m to investment fraud.
 
The fraudsters often use cold calling to target a victim, then put pressure on you to act quickly by claiming the opportunity is time limited. Emails, social media, web search engines and letters can also be used, and criminals are currently taking advantage of the coronavirus pandemic and low interest rates to encourage people to look at other investments offering a better return.
 
Red flags

So, how do you know if it’s a scam? There are a number of red flags to look out for… An unsolicited, cold call about an investment opportunity is illegal and most definitely a scam. If you’re pressed into making a hasty decision, it’s a scam, as a legitimate company will never put pressure on you to invest. If you see an opportunity on social media, possibly regarding cryptocurrency and potentially with a fake ‘celebrity endorsement’, it’s more than likely a scam, as cryptocurrencies are not regulated by the Financial Conduct Authority (FCA), which means your investment is unprotected and your lost money will not be returned. If the investment company isn’t listed on the FCA’s Financial Services Register it’s a scam, as all legitimate investment companies are listed. (Tip: check before you invest and check again before you make payment to make sure nothing has changed.)
 
Protect yourself

  • Make the right checks
  • Use the contact details on the FCA’s register, not those the firm gives you -  it could be a fake company cloned to look genuine
  • Don’t assume it’s real: scams appear legitimate, but professional-looking websites, adverts or social media posts don’t mean the investment opportunity is real
  • Research the company and, if necessary, get independent advice
  • Never download software or apps that give someone remote access to your devices, such as computer, laptop, tablet or phone
  • Do not allow anyone to manage an investment, upload ID documents or set up a cryptocurrency wallet on your behalf. 

BeScamSmart

The FCA has created an online tool called ScamSmart to help you identify if your investment is real or a scam. By answering some simple questions, you will get a clearer picture if the investment is real, if the company is regulated by the FCA and whether it could be a cloned company. Please note, it’s up to you to check if the telephone number you’ve been given matches those registered to the company and for you to contact the registered company to confirm the details.
 
Report a scam

If you’ve been contacted by an unauthorised firm or individual trying to scam you about an investment, your pension, taking out a loan, insurance and warranty products, claims management or consumer credit, or if you’re suspicious about a financial investment or service you’ve paid for, you can help others by reporting the scam to the FCA.

Investment scams are just one of many different type of scams prevalent at the moment. There are also scams going around regarding your driving licence, TV licence, HMRC and tax, competition or lottery scams and eBay/Amazon merchant scams whereby the seller doesn’t deliver goods paid for. If you’ve been contacted about or fallen victim to one of these scams, please contact Action Fraud on 0300 123 20400 or online by clicking here.
 
As Financial Planners, Mathews Comfort works to the highest professional standards and is authorised and regulated by the Financial Conduct Authority, designed to protect the integrity of the UK financial system and ensuring we offer an open, transparent, accountable service. If you’d like to discuss your financial future, current financial plan and desire to implement a financially independent early retirement plan, please get in touch. Either call us on 01865 208 000 or email us at: info@mathewscomfort.co.uk

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