Financial Fraud

Financial fraud is on the increase. Most people think they wouldn’t fall for a fraudulent text or email, but criminals are more sophisticated than ever. We look at the most common types financial scams and how you can avoid becoming a victim of fraud. Remember, if its too good to be true, it probably is!

Investment Fraud

The majority of investment frauds are run out of offices known as boiler rooms. You are called by a professional-sounding broker who offers you investment opportunities that offer incredible potential for making profit. They usually offer to sell you shares or bonds, but may also offer other investments such as precious metals. Fraudsters can be financially knowledgeable and articulate, with credible websites and testimonials making it hard to distinguish from the real thing. Here are some warning signs:

  • They may say they are only making the offer available to you and ask you not to tell anyone else about the opportunity
  • May downplay the risks to your money they might suggest you will own actual assets that could be sold to make back any losses
  • Pressure to invest quickly  the offer may only be available for a short period, or a discount may be applied if you invest before a set date
  • Tempting returns, better interest rates than elsewhere

Pension Fraud

Once you have transferred your pension money into a scam, it is too late. You could lose all your pension money as well as face additional fees and tax. The scam will often start by someone contacting you unexpectedly about:

  • Taking your pension money before you are 55
  • The ways you can invest your pension money
  • An investment or other business opportunity that you have not spoken to them about before.

You may be encouraged to take out a large lump sum, or your whole pension pot in one go to let them invest it for you. Fraudsters may use terms like pension liberation, free pension review or one-off investment. Never make a rush decision about your pension money, these offers may seem convincing, however the aim is to get you to cash in your pension pot and transfer the money.

Phone Scams

Vishing or fraud over the phone is where a fraudster calls claiming they are from your bank or other trusted organisation. It is now easy for fraudsters to fake the telephone number on the screen and research you to find basic details. A genuine call from your bank would never ask you to provide full personal information such as security password or PIN, even by tapping into the keypad.
Often with these calls, the caller will not give you time to think, or is insistent. Stay in control by having the confidence to refuse any unusual requests for personal or financial information. Always listen to your instincts, if something feels wrong, then it is probably right to question it.

Text Message Scams

“Smishing” is when fraudsters pretend a message is from your bank or another organisation you trust. Usually the message will lead you to believe that there has been a fraud on your account and ask you to deal with it by visiting a website link to update your personal details or calling a number. Often the sender uses an urgent tone, suggesting you should act now.

Email Scams

Always be aware of suspicious or unsolicited emails that are supposedly from your bank or financial institution. This is known as “Phishing”. Never automatically click on a link it may contain before stopping to check if genuine first. Here are some things to look for:

  • Check the senders address, often it will not match the website address. Roll your mouse pointer over the senders name to reveal the true address.
  • There may be a prominent website link, seemingly the genuine address, however may have one character different.
  • The email may not be personalised, for example; addressed to “Dear Customer”
  • Spelling and grammar mistakes are common
How do I check a firm is genuine?

Almost all Financial Services firms must be authorised by the Financial Conduct Authority, if they are not, its probably a scam. You can check the Financial Services Register to see if a firm or individual is authorised or registered.

To check the risks of a potential investment  you can use the FCA warning list. This will also allow you to search to see if the firm is known to be operating without authorisations. Even if a firm is not on the list, it may still be a scam as firms change names and details all the time. Be wary of a clone firms, where a fraudster may use a genuine firms details, always use the contact details provided on the FCA website, rather than those given by the firm.

If you believe you have been a victim of fraud contact your bank or card company immediately. You should also report incidents of fraud to Action Fraud, the national fraud and cyber crime reporting centre for the police. You can contact Action Fraud on 0300 123 2040 or at


Sources: March 2018