How to avoid being scammed
By Kirsten Hastings, 1 Mar 17
The Financial Conduct Authority (FCA) has revealed the tactics used by investment fraudsters to deceive the over 55s, as it urges the demographic to check investment opportunities are genuine before parting with their money.
Those surveyed were more aware of certain signs of investment fraud, but less aware of others.
For example, 92% agreed that being contacted out of the blue could be a warning sign, but 19% were unaware that being promised returns above the market rate could also be a tactic.
Others include:
- Offering lucrative returns above the market rate and downplaying the risks of the investment;
- Using flattery to make potential victims feel good, such as praising them for being a knowledgeable investor;
- Saying that the deal is only available to the target and asking them to keep it a secret;
- Saying that other clients have invested or want in on the deal (known as ‘social proof’); and
- Putting them under pressure to invest in a time-limited offer.
To avoid being a victim, the FCA has advised consumers to, at the very least;
- Reject unsolicited contact about investments;
- Before investing, check the Financial Services Register to see if the firm or individual you are dealing with is authorised;
- Check the FCA warning list of firms to avoid; and
- Get impartial advice before investing.
Be alert
Mark Steward, FCA director of enforcement, said: “Be alert to the warning signs like being contacted out of the blue, promises of low risk and/or guaranteed above market returns, special deals just for you, time pressure and, very often, flattery.
“Be vigilant. Don’t let them push you into making a decision and parting with your money. Question their claims. Check the Financial Services Register and seek impartial advice. If in any doubt – don’t invest.”
Tags: FCA | Fraud | Pension Freedoms | Scams
