Are you ScamSmart?

A rising number of financial scams were reported to the Financial Conduct Authority (FCA) last year, with a continued trend for rising volumes of scams.

The FCA reported that consumer calls about scams have risen by 193% in the past five years.

In their latest published research, the FCA revealed that many consumers know the signs of a scam and have been contacting the FCA to report scams before losing money to fraudulent activity and this has prompted an update on their ScamSmart campaign

The analysis included a survey of 1,036 UK adults who hold or previously held investments and have avoided a suspected financial scam.

The things to look for included:

  • Finding mistakes in marketing materials.
  • Receiving requests for personal information was amongst the two most common signs of a scam.
  • Nearly four in ten respondents said their research into a scam helped them spot the tell-tale signs it was dodgy, with 34% relying on “pure gut instinct” to tell the difference between a scam and a genuine investment opportunity.
  • Being contacted unexpectedly was a red flag for a third of respondents.
  • Being  pressured to invest before an ‘offer’ ended, was also high up on suspicions.

The research coincides with the FCA’s latest ScamSmart campaign launch, designed to arm consumers with the tools they need to identify and avoid scams.

Mark Stewart, executive director of enforcement and market oversight at the FCA, warned investors that scammers are becoming increasingly sophisticated, using a variety of new tactics including impersonation texts or calls. Stewart said:

“Once money has been lost in this way, it’s difficult to get back, so if something seems too good to be true, it probably is. It’s great to see so many investors being able to spot the signs of a scam, and helping others to do the same – you don’t need to be a Sherlock Holmes to spot scams.

“Our Scam Smart advice and tips together with the FCA’s Warning List provides all the clues you need to sort the genuine investments from the fraudulent ones.”

Read more about the FCA’s ScamSmart campaign

Read about how the FCA are clamping down on ‘Influencers’ & Buy Now Pay Later

Other warning signs are:

  • 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, such as much better interest rates than elsewhere. However, scammers may also offer smaller, more realistic returns to seem legitimate.
  • Flattery – building a friendship with you to lull you into a false sense of security.
  • Remote access – scammers may pretend to help you and ask you to download software or an app so they can access to your device. This could enable them to access your bank account or make payments using your card.