Scams are getting more sophisticated (and common) so beware…


Unfortunately, we are continuing to hear of more people falling victim to scams during the pandemic. These can take many different forms with some about pensions or other high-return investment opportunities. Scammers can be sophisticated, opportunistic, appear authentic, using Covid-19 as an opportunity to persuade people to disclose personal or financial information either online or verbally, and whilst they may be likely to target the vulnerable, anyone can be affected or taken in.

All scams are designed to get hold of your hard-earned money. This is done by getting you to reveal your personal details, stealing your information, or even convincing you to willingly hand over the cash.

New figures, from the City of London Police in a report to Action Fraud, reveal that more than £63m was lost nationally by victims of investment fraud through contact made via social media. Some victims mentioned being approached directly by an investment fraudster online, whilst others said they were attracted to a fake investment through adverts.

In April, Action Fraud, the national reporting centre for fraud and cyber crime, reported that £1.8 million had already been lost to pension fraud this year. It went on to say there has been an increase in reporting this year, with 107 reports of pension fraud received in the first three months of 2021. This is an increase of almost 45 per cent when compared to the same period in 2020.

Knowing how to recognise a scam can be extremely difficult. Chances are, you’ve come across the most common type of scams – the spam emails, often from other countries, or attempting seemingly to be from HMRC or your bank.

Spotting scams is getting harder

Growing sophistication means spotting these scams isn’t always easy, but spelling and grammar mistakes, plus unfamiliar links are telltale signs. If you are in any doubt, ignore or block the message, contact the named organisation directly and never disclose personal information such as bank details, PINs or passwords to any unsolicited contact. HMRC and banks will never ask you to share personal information in this way.

An example of this sophistication happened to one of our clients last year who was looking for a better return on their Cash ISA. After a search on the web he found what he thought was a much better return from a very well-known investment provider and made an enquiry. The person on the end of the line was very helpful and discussed how five products were available paying different interest rates, all reasonably, but not significantly, higher than he was currently receiving.

He was then sent an email along with a 20-page prospectus complete with the well-known company branding. At this point, the client was mentally committed to transferring his £80,000 Cash ISA.

However, as he had a good relationship with his Financial Planning Consultant he wanted to double-check the interest rate was correct. Our adviser commented that the interest rate looked quite high, taking into account that deposit rates are at historically low levels due to the Covid crisis, and wanted to look at the email and brochure in more detail.

Alarm bells started to ring as some of the words in the email from the company didn’t look quite right. The prospectus, however, was incredibly convincing. Our adviser made contact with the well-known company who confirmed the prospectus had not been issued by them. They confirmed this was indeed a scam as they didn’t have any products of this nature. The company also then acted and the matter was immediately then passed on to their fraud department.

In this instance what saved the client from this scam was having an active relationship with a trusted and regulated adviser. This meant he felt it best to get another opinion first before making a decision. The experience of the adviser meant he could see through what was a very convincing scam to the public, and saved the client from parting with his £80,000 and all the stresses, strains and angst that would have gone with transferring the monies over.

Having the support of a trusted adviser you can rely upon is more important than ever.

At Armstrong Watson, our quest is to help our clients achieve prosperity, a secure future and peace of mind. We are a firm of Chartered Financial Advisers and our Financial Planning team is regulated by the Financial Conduct Authority (FCA). You should always deal with a trusted and regulated financial advisory firm when dealing with your finances.

This article featured in Insight, our quarterly financial planning and wealth management magazine. To read the latest issue or subscribe to future editions click here.

For more information contact James by email or call 0808 144 5575.

Contact James