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Investment Fraud and Scams
BEWARE OF INVESTMENT FRAUD AND SCAMS
How to spot a scam
There are some general rules that should set alarm bells ringing wherever you see them. Be very suspicious if:
· something sounds too good to be true – like free stuff or quick, easy money
· you’re asked to give out personal or bank account information
· you aren't given long to make a decision or feel pressured into making one
· you’re contacted unexpectedly by a company or person you have never heard of – this can be by post, email, phone, text or on the doorstep
· you’re asked to pay anything up-front, or
· the only contact details are a mobile phone number and a PO box address
Phishing is where someone tries to con you into revealing personal information like your bank account details. A common trick is to send you a fake email pretending to be from your bank or another organisation or company you trust like HMRC or PayPal, asking you to visit a website and log in with your account details. The site looks just like your bank’s website, but is really a fake site set up by criminals to get your details.
This is also known as the ‘419 fraud’ or ‘Nigerian bank scam’. You'll receive emails from people claiming to be ex-ministers or royalty from other nations, often in Africa, asking if they can use your bank account to deposit a large sum of money in order to get it out of the country. They will normally offer to pay you a fee.
They'll ask for your bank details and may also ask you to send money to cover legal fees and so on. But there is no money and you'll be out of pocket. There is also a similar scam coming from China that’s related to wills.
This is a scam where fake stock market traders contact you out of the blue and give you the hard sell on buying shares that are either non-existent or virtually worthless and so difficult to sell on.
You might be offered secret stock tips to make it all seem more believable and sent fake share certificates to try to make the business seem legitimate. Then the fraudsters will disappear with your money. Recent scams have involved dubious investments relating to carbon credits and rare earth metals. The fraudsters will often draw on topical issues such as clean energy
Prize draws, sweepstakes and lottery scams
You could get a letter or email telling you that you have won a lottery, sweepstake or other prize draw and offering you a large prize. The scam can then take different forms:
· you might be asked to send a small amount of money in order to claim it as a processing fee or legal fee – but no prize exists and you lose the cash
· you might be asked to prove your identity with a passport – which is then used by the crooks to steal your identity
· you might be asked to provide your bank account details so they can pay the money in but this information is then used to clear out your account
· you might be told you have won a prize and you need to ring a special phone number to claim it. The call goes to a premium rate number, takes ages and will cost you more than the value of the prize you’ve won.
This is very similar to the advance fee fraud described above.
Vishing is the act of using the telephone in an attempt to scam a user into providing private information that will be used for identity theft. The scammer usually pretends to be a legitimate business, and fools the victim into thinking he or she will profit. Sometimes the fraudster will pretend to be the Fraud Investigation Unit of your bank and state that there has been a security incident and will ask for your card details, including your PIN. The fraudster may say that a courier is coming to collect your card. Of course, the courier is merely an accomplice of the fraudster. Another way that the fraudster may try to convince you that he is genuine is by asking you to contact your bank to verify the call. Unfortunately the fraudster does not hang up from the previous call and merely gets his accomplice to pretend to be from the bank.
To protect yourself, you are advised to be highly suspicious when receiving unusual telephone calls directing you to call and provide credit card or bank numbers. When in doubt, calling a company's telephone number listed on billing statements or other official sources is recommended instead of calling numbers from messages of dubious authenticity
Remember: If it sounds too good to be true, it probably is!
You should only deal with a financial services firm that is authorised by the Financial Conduct Authority (FCA), and check the FCA’s register (see website link below) to ensure it is. If you deal with an unauthorised firm you will not be covered by the Financial Ombudsman Service or the Financial Services Compensation Scheme if things go wrong
FCA consumer helpline – 0800 111 6768
FCA consumer protection
FCA website – Boiler Rooms Guidance
FCA website – List of unauthorised persons