Spot Fraud to Stop Fraud
Action Fraud have reported that Coronavirus-related fraud went up by 400% in March 2020 alone.
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Although most of us are finding these uncertain times a challenge, fraudsters see them in a different light – as an all-new opportunity.
In fact, Action Fraud have reported that Coronavirus-related fraud went up by 400% in March 2020 alone. It’s clear that fraudsters are using this difficult period – our concern and confusion heightened – to their advantage.
The Financial Conduct Authority (FCA) itself has reported that it has become aware of a fake website impersonating itself and at the time of writing was attempting to have the site taken down.
Despite all the challenges we’ve recently faced, keeping our clients safe from fraud remains a key priority for us.
We believe that the best way to do that is through education, heightening your awareness of the types of scams out there, and giving practical advice and we’re grateful to the FCA and some Providers for the information they have supplied.
We’re running a series of posts on this subject and are starting with advice given by the FCA about potential coronavirus (COVID-19) scams, how they could affect you, and how to protect yourself.
A major event like Coronavirus can initiate new types of scam activity. You may have already seen reports of fraudulent activity around the sale of face masks and hand sanitiser.
When it comes to financial services, the scam activity is more nuanced and often appears after the initial shock of a major event. With that in mind, we are urging people to be vigilant for scams that could appear over the coming months.
Scammers are sophisticated, opportunistic and will try to get personal details or money from victims in many ways. They tend to target people who are more vulnerable or susceptible to being scammed, particularly in the current climate with many more people being at home.
What tactics to look out for
- Exploiting short-term financial concerns, scammers may ask you to hand over an upfront fee – usually between £25 and £450 – when applying for a loan or credit that you never get. This is known as loan fee fraud or advance fee fraud.
- ‘Good cause’ scams. This is where investment is sought for good causes such as the production of sanitiser, manufacture of personal protection equipment (PPE) or new drugs to treat coronavirus – with scammers using the promise of high returns to entice consumers.
- Using the uncertainty around stock markets, scammers may advise you to invest or transfer existing investments into high return (and high risk) investments.
- Clone firms – firms must be authorised by the FCA to sell, promote, or advise on the sale of insurance products. Some scammers will claim to represent authorised firms to appear genuine. In particular, be aware of life insurance firms that may be cloned.
- Scammers may contact you claiming to be from a Claims Management Company (CMC), insurance company or your credit card provider. They may say they can help you recuperate losses by submitting a claim, for the cost of a holiday or event such as a wedding cancelled due to coronavirus. They will ask you to send them some money or your bank details.
- Cold calls, emails, texts or WhatsApp messages stating that your bank is in trouble due to the coronavirus crisis, and pushing you to transfer your money to a new bank with alternative banking details.
How to protect yourself
- Use the Financial Services Register and Warning List to check who you are dealing with.
- Reject offers that come out of the blue.
- Beware of adverts on social media channels and paid for/sponsored adverts online.
- Do not click links or open emails from senders you don’t already know.
- Avoid being rushed or pressured into making a decision.
- If a firm calls you unexpectedly, use the contact details on the Register to check that you’re dealing with the genuine firm
- Do not give out personal details (bank details, address, existing insurance/pensions/investment details).
You can report the firm or scam to the FCA by contacting their Consumer Helpline on 0800 111 6768 or using their reporting form available from their website.
Author: The Financial Conduct Authority. 1/5/20
Link to post: https://bit.ly/2NGR1TA
We hope you found this useful and in our next blog we’ll cover ways to identify a pension scam.