2 Feb 2022

Be Scam Smart!

We at FiveWays keep up to date on the latest advice from the Financial Conduct Authority (FCA) to protect you and FiveWays from the scammers. We have heard of an increasing number and types of scams over recent years and since the COVID Pandemic there has definitely been an increase in this type of crime.

Scams are getting increasingly more sophisticated and the fraudsters can be articulate, financially knowledgeable, with credible websites, testimonials and materials that make then hard to distinguish from the real thing.

The types of investment and pension scams are so vast and wide it would be impossible to list and warn you about them all but there are some basis principles you can apply:

Reject Unexpected Offers 

If you’re contacted out of the blue about an investment opportunity, the chances are it’s a high-risk investment or a scam. Scammers usually cold-call but contact can also come by email, post, word of mouth or at a seminar or exhibition. Scams are often advertised online too. If you get cold-called, the safest thing to do is hang up. If you get unexpected offers by email or text, it’s best to simply ignore them.

You can register with the Telephone Preference Service and Mailing Preference Service to reduce the number of letters and cold calls you receive.

Callers may pretend they aren’t cold calling you by referring to a brochure or an email they sent you – that’s why it’s important you know how to spot the other warning signs.

Spot the Warning Signs 

  • Unexpected contact – traditionally scammers cold-call but contact can also come from online sources, eg email or social media, post, word of mouth or even in person at a seminar or exhibition.
  • Time pressure – they might offer you a bonus or discount if you invest before a set date or say the opportunity is only available for a short period.
  • 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.
  • False authority – using convincing literature and websites, claiming to be regulated, speaking with authority on investment products.
  • 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.
  • Check if a firm is FCA-authorised Almost all financial services firms must be authorised by the Financial Conduct Authority (FCA), if they’re not, it’s probably a scam. You can check the FCA Register see if a firm or individual is authorised or registered with them. 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.

If you use an unauthorised firm, you won’t have access to the Financial Ombudsman Service or Financial Services Compensation Scheme (FSCS) if things go wrong – and you’re unlikely to get your money back.

If you use an authorised firm, access to the Financial Ombudsman Service and FSCS protection will depend on the investment you are making and the service the firm is providing.

Not all investments are regulated by the FCA (eg, wine) – find out more about Unregulated Collective Investment Schemes.

Check it’s not a ‘Clone Firm’

A common scam is to pretend to be a genuine firm (called a ‘clone firm’). Always use the contact details on the FCA Register, not the details the firm gives you. You should also check the firm’s details with directory enquiries or Companies House to make sure they’re the same.

Check the FCA Warning List 

Use the FCA Warning List to check the risks of a potential investment – you can also search to see if the firm is known to be operating without FCA authorisation. Even if a firm is on the FCA list, it may still be a scam – firms change names and details all the time.

Get Impartial Advice

You should seriously consider seeking financial advice or guidance before investing. You should make sure that any firm you deal with is regulated by the FCA and never take investment advice from the company that contacted you, as this may be part of the scam.

If You’re Suspicious, Report It

You can report the firm or scam to the FCA by contacting the FCA Consumer Helpline on 0800 111 6768 or using their Reporting Form.

If you’ve given your bank account details to a firm you think may be operating a scam, tell your bank immediately. If you've agreed to transfer your pension and now suspect a scam, contact your pension provider straight away. They may be able to stop a transfer that hasn't taken place yet.

Be Wary of Future Scams

If you’ve already invested in a scam, fraudsters are likely to target you again or sell your details to other criminals. The follow-up scam may be completely separate or related to the previous fraud, such as an offer to get your money back or to buy back the investment after you pay a fee. 

If you have any concerns at all about a potential scam, contact us or the FCA immediately.


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