Find out how you can protect yourself from frauds in the investment industry and make sure whether you’re dealing with an authorized firm.
The sophistication of scams is increasing. The fraudsters are intelligent and financially knowledgeable with reputable websites, testimonials and documents that are difficult to differentiate from real ones.
If it sounds too appealing to be true most likely is.
We’re aware that scammers are targeting those looking for investment opportunities online, specifically via search engines such as Google or Bing. While some scammers promise huge returns in order to lure you to invest but they also may offer reasonable returns in order to make their claims appear more genuine. The companies that offer or promote investment or other products via search engines aren’t always authorised or controlled by the FCA.
Refuse unexpected offers
If you’re approached by someone from the air about an investment opportunity there’s a good chance it’s an investment scam with a high risk or fraud.
The majority of scammers call cold, but contact could also be made through email, mail or through word of mouth at an exhibition or seminar. The scams are usually advertised online , too.
If you’re cold-called the best way to respond is to put the phone down. If you receive unexpected offers via text or email you should do not respond to them.
You can sign up with The Telephone Preference Service and Mailing Preference Service to cut down on the amount of cold and uninviting calls you receive.
Some callers might appear to be calling you cold by pointing to an advertisement or an email they’ve sent to you. This is why it’s crucial to be aware of other indicators of danger.
Look for warning indicators
Unexpected contact – typically scammers call, but the contact could originate from online source slike social media, email such as a post, a blog or word of mouth and even at an event in person conference or an exhibition.
Time pressure – they may offer a reward or discount if your investment is made prior to a specific date or if the offer is only for a brief period.
Social proof – they might publish fake reviews and claim other customers have invested or are interested in taking up the offer.
False returns – scammers often offer promises of lucrative returns which sound too appealing to be true like much higher rates of interest than others. But, they may offer lower, less real-world returns that appear to be genuine.
Untrue Authority – using convincing materials and websites, which claim to be regulated, and speaking as if they are experts on investments.
Flattery is the process of forming a relationship with you in order to lure you into a false feeling of security.
Remote Access – scammers could pretend to assist you and request you to download software or an application in order to access your device. This may allow the fraudsters to access your bank account and use your card to make transactions.
Verify if the firm is FCA-approved
Most financial service firms have to be approved by us. If not, they’re probably an enigma.
Examine on the Financial Services Register to see whether an individual or company is authorized or registered. Always visit the Register through your FCA website, and not via hyperlinks in emails or on the website of the company which offers an investment.
Find out if the firm’s “firm reference number’ (FRN) and contact information are identical to those listed in the FCA Register.
If there’s no contact numbers on the Register or if the company says they’re not up to date Contact to the FCA Consumer Helpline on 0800 111 768.
If you’re dealing with an international company, it is recommended to contact the regulatory body in the country you are dealing with and review the scam warnings of foreign regulators.
If you choose to use an unauthorised company, you won’t be able to gain accessibility to either the Financial Ombudsman Service or Financial Services Compensation Scheme (FSCS) in the event of a problem – and you’re not likely to receive your refund.
If you work with an authorized firm, you will have access into access to the Financial Ombudsman Service and FSCS protection will be contingent on the kind of investment you’re making and the services that the firm provides.
Make sure it’s not a copy firm’
A common fraud is to appear to be a real firm (called”clone company”).
Always use the contact information in the FCA Register, not the information provided by the company.
It is also advisable to check the company’s information with directories inquiries as well as Companies House to make sure that they’re the same.
Review for the FCA Warning List
Make use of the FCA Warning List to check the potential risks of an investment. You could also look up whether the company is believed to be operating in violation of authorisation.
Even if a company isn’t listed on the FCA list, it might be a fraud – firms change their names and contact details often.
Get independent advice
It is advisable to seek financial advice or guidance prior to making a decision to invest. It is essential to verify that any company you do business with is regulated by us . You should do not seek investment advice from the firm that approached you, as it could be part of the fraud.
MoneyHelper provides information about investing as well as the best way to find an adviser for financial matters. You can also obtain more information from a group which represents advisers like PIMFA.
Be wary of any scams in the future.
If you’ve been a victim of an e-commerce scam, fraudsters will likely target you in the future or offer your personal information to other criminals.
The next scam might be totally separate or connected to the earlier scam for example, an offer to return the money back, or purchase the investment back after you pay a cost.
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