Cookies on the PFS website

By using and browsing the PFS website, you consent to cookies being used in accordance with our policy. If you do not consent, you are always free to disable cookies if your browser permits, although doing so may interfere with your use of some of our sites or services. Find out more »

Personal Finance Society
Recently added to my basket
 
Sorry but there was an error adding this to your basket. Please try adding it again
 

ScamSmart

A profession united against scams

We are calling on Personal Finance Society members to commit 15 minutes per month to help identify and report potential scams. 

Your 15 minute commitment

For personal finance professionals, scams are easier and quicker to spot than unsuspecting members of the public. We are calling on all Personal Finance Society members to commit 15 minutes per month to help identify and report potential scams. Members are also being asked to help raise awareness of scams amongst their clients, professional network and other connections.

As a profession we have the opportunity to make a huge impact in smoking out and helping close down investment scams before they do too much damage.

Endorse the ScamSmart campaign by signing up to the 15 minute commitment

Click here to endorse the campaign

Where to look

  • Unsolicited phone calls  - hardly a day goes past without at least one telephone call from someone offering to 'unlock' a pension or carry out a 'free pension review'. Most of these calls are from organisations that are not authorised. If you receive such a call try to get the following information:
    • company name and address
    • website address
    • FCA authorisation number
    • Try to get them to send you literature in the post (or by email)
    If you get such information and are still suspicious then report it via the FCA's website
  • Texts and emails - Similarly, many of those that are scammed respond to unsolicited text messages or emails promising 'too-good-to-be-true' investment opportunities. Again, if you receive one of these try to dig a little deeper. However, proceed with caution as emails have the potential to carry viruses. It goes without saying that you should reveal no personal information.
  • Press adverts - many victims of scams are lured by the promise of high returns or unmissable investment opportunities, sometimes through advertisements in national and local press. If you are reading a newspaper pay closer attention to the adverts to see if anything strikes you as being potentially untoward. Are the returns on offer unusually high? Is a high risk scheme being promoted as low risk? Report anything suspicious.
  • Websites - Why not spend ten minutes browsing online in search of suspicious investment or pension opportunities? Your expertise will help you sniff out anything that seems odd. You will notice that it is usually the ads in search results that are most suspicious, so start here and see what you unearth...a little digging may well unearth something suspicious that a member of the general public might not spot. Again, don't be afraid to report it no matter how trivial it seems.

Don't be afraid to report it no matter how trivial it seems.

Being ScamSmart - the facts

Over 3,000 people were caught up in investment scams in 2015/16, with an average loss of £32,000 (Source: Action Fraud). But the actual figure is probably much higher as most scams go unreported.

Affluent retirees aged over 60 are most likely to be victims. And it's not just inexperienced investors who are falling victim; savvy investors are falling victim to and are the target for more sophisticated scams.

Scammers tactics

Scammers use a range of tactics to secure the trust of those they intend to scam. They may use flattery and emotional manipulation to get them onside. They then typically push a time limited offer to get people to invest immediately and without consultation. Their 'unique investment opportunities' usually offer 'guaranteed' returns at 'little' or 'no risk' to capital (which is usually not the case).

Many are investments in shares, foreign exchange, commodities and overseas schemes, such as hotel developments.

FCA ScamSmart: press release video

Pension Regulator: Protect yourself against pension scams

Watch these short video case studies to get a good idea how people are being caught out:

Clive's Story

Clive's story

Derek's Story

Derek's story

Reporting a suspected scam

If you suspectan individual or firm ma be operating a scam, first visit (the FCA list of unauthorised firms) to check they aren't already known to the FCA.

If they aren't already on this list you should report suspected scams to the FCA at fca.org.uk/consumers/reports-scam-unauthorised-firm using the webform provided. Click here to go directly to this page.

FCA investigations

The FCA takes enforcement action against firms and individuals not authorised or exempt under the Financial Services and Markets Act (FSMA) but who carry on regulated activities in breach of this legislation and/or who contravene restrictions on financial promotions. Firms and individuals acting in breach of FSMA are likely to be scam firms and involved in some element of investment fraud.

From March 2015 to April 2016 the FCA received over 8,500 reports about potential unauthorised activity. UBD assesses all of these cases. If the firms and/or individuals reported fall within the FCA's remit then it will investigate and take action on as many as it can. This includes taking civil court action to stop activity and freeze assets, insolvency proceedings and, for the most serious cases, criminal prosecution. In 2015/16 the FCA's actions sent 8 people to jail for a total of 32 years, it froze over £2.7 million, returned nearly £1.9 million to victims and secured injunctions and other orders against unauthorised firms and those behind them. These actions are designed to do three things: firstly, to detect and disrupt unauthorised firms and individuals; secondly, to protect other consumers from falling victim to unauthorised business activity and; thirdly, to bring justice to the victims.

The FCA also issued public warnings about 250 unauthorised firms and individuals in order to deter potential investment frauds.

In recent years, there has been an increase in activity of unauthorised companies promoting 'free pension reviews'. Since December 2013, the FCA has been looking specifically into the activities of unauthorised pension introducer firms who often initiate the pension transfer process with promises of better returns.

The work is ongoing and involves reviewing all incoming reports, analysing whether the activities are in breach of FSMA and identifying the most prolific and serious cases in order to progress to an investigation.

Action Fraud

As the FCA's remit is limited to unauthorised business activity, it cannot take action against all types of investment fraud and, in some cases, even if it can take action, the money has already been lost. As a result, the FCA is part of a multi-agency fight against investment scams. If a client, or anyone you know, has lost money to investment fraud they should report it to Action Fraud on 0300 123 2040 or at www.actionfraud.police.co.uk

ScamSmart