Ask your clients what their top concerns are in 2020, and finances are sure to top their list. An unstable market, lockdown and fears about their investments aren’t the only things they have to worry about.
On 1st July 2020, the Financial Conduct Authority (FCA) relaunched its ScamSmart campaign to fight this year’s increase in pension and investment scams.
What is ScamSmart?
The FCA and The Pensions Regulator (TPR) created the programme to help educate the public on how to stay safe from scammers. This year’s relaunch features a series of CCTV-style pension scam campaign videos across TV, radio and digital channels. This includes common scam tactics, with the first of many PR bursts later in the month.
Mark Steward, the FCA’s Executive Director of Enforcement and Market Oversight, explains:
“Fraudsters will exploit the coronavirus to prey on anxiety and fear of savers and investors, especially those who may be vulnerable. That’s why we’re urging anyone who is thinking about transferring their pension to check who they are dealing with and only use firms authorised by the FCA.
‘Reject all unexpected and unsolicited offers; get to know the warning signs of scams, like high rates of return which sound too good to be true, so-called special offers or pressure to make a quick decision and check our tips and advice on our ScamSmart website.”
What are 2020’s common scams?
Scammers are intelligent. And they’re always looking for new opportunities to exploit the vulnerable. They know that many older people are concerned about the value of their pension pots and don’t understand their options. Desperation, anxiety and uncertainty about their financial futures make them ripe targets.
The FCA has compiled a list of tactics scammers might use in 2020:
- Loan fee or advance fee fraud – Scammers may ask victims to pay an upfront fee – usually between £25 to £450 – for a credit or loan application.
- High-return investments – Claims of promising returns may tempt people to fund risky investments such as cryptocurrency and crowdfunding.
- Claims for cancelled events – Scammers may pretend to represent credit card companies, insurance providers or a Claims Management Company (CMC). They’ll ask victims to send them their bank details or money to submit a claim for cancelled holidays, weddings or other events.
- ‘Good cause’ scams – Playing on victims’ emotions, fraudsters may promise high returns for investment in hand sanitiser production, personal protection equipment (PPE) or coronavirus drugs.
- Clone firms – Impersonating legitimate firms that sell insurance products is another tactic.
- Bank transfer scams – Emails, WhatsApp messages, cold calls or other communications may urge people to transfer their money to a new bank because their existing one is in trouble due to COVID-19.
Help others become ScamSmart
It’s your duty to safeguard your client’s pension pots from those that don’t have their best interests at heart. Your clients need your support and guidance more than ever.
Listen to them and check in often. A quick conversation can give them reassurance about their finances. And, more importantly, the confidence to envision a brighter future where they don’t need to consider risky investment schemes to make ends meet.
You should also remind your clients of the FCA’s recommended steps to stay safe:
- Double-check who you’re speaking to: Beware clone firms that mimic legitimate ones. You should always check the FCA’s Financial Services Register to ensure you receive regulated advice.
- Reject out-of-the-blue offers: Unsolicited free pension reviews are often too good to be true. You should be wary if the company is one you’ve not been in touch with before.
- Avoid being rushed or pressured: Limited-time deals and high returns are tactics used to get people to part with their hard-earned cash. Encourage your clients to think before they act and always do their research.
- Get trusted financial advice: This is obvious – but remind your clients that you’re there to support them and help them find a solution to their financial worries.
If you or your client suspect they’ve been in touch with a scammer, check the FCA’s Warning List. Remember, not all firms may be listed. Therefore, if you think your client is a victim of pension or investment fraud, report the scam immediately to the FCA. Your cooperation can make a positive impact and prevent others from losing their savings.