As a profession, we have a vested interest in contributing to
the wider effort of helping protect consumers from pension and
A low interest rate environment, coupled with far reaching
pension reforms, have left consumers vulnerable to a raft of 'too
good to be true' unregulated pension and investment scams. A
growing number of people are losing thousands of pounds every week
to increasingly sophisticated scams. We need to mobilise as a
united profession to help the authorities by sniffing out and
reporting suspicious investments and 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
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:
If you get such information and are still suspicious then report it
via the FCA's website
- company name and address
- website address
- FCA authorisation number
- Try to get them to send you literature in the post (or by
- 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
- 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
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
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
Watch these short video case studies to get a good idea how
people are being caught out:
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.
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
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
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
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.
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