I’m not sure that online financial scams have ever been out of the spotlight. We’ve been reporting on and warning clients for years about being scam safe.
We even set up an FAQ’s page setting out what to look for over six years ago. Everything we highlighted back then is still valid today. Even more so as the cost of scams continues to soar.
Warnings about Facebook online financial advice adverts.
The Financial Conduct Authority (FCA) has now warned that at least 10% of Facebook or Meta adverts in the UK are now financial scams. Costing over £40 million. According to the FCA in just one week they found over 1,000 adverts which contravened the rules around online financial advice advertising.
More than this almost a third of Facebook adverts are considered to be high risk. So, what do you need to look out for? Here are some of the common telltale signs:
- Adverts which don’t contain any warnings about the risks of the proposed investment.
- Adverts which offer high returns which are too good to be true.
- Adverts which put an imminent time limit on your investment to prey on the fear of missing out.
- Generally, any adverts for crypto investments or foreign exchange trading.
- Adverts which ask you to use WhatsApp as the means of communicating and dealing with your transaction.
- Adverts saying that you’ve won a prize which are designed to capture your personal details.
- Adverts for games and quizzes again looking to capture your personal information.
- Often fake charity adverts are scams.
As always please be careful.
Pension scam protections are working.
The good news for savers is that the systems put in place by the Money and Pensions Service (MPS) to protect pension transfers are working. Although the process frustrates financial advisers.
Over 50,000 potential scam flags have been raised and investigated over the last five years. Most were rightly raised as concerns about overseas investments from pension transfer funds which accounted for 35% of the flags. Others included:
- High risk investments
- Complex investments
- High fee structures
- Links to employment
But 45% of the flags were raised for reasons which weren’t recorded. This is the main area where the MPS needs to improve.
SIPP’s to be subject to stricter controls.
The FCA has finally announced plans to impose stricter due diligence on SIPP’s. Not before time with over £500 million being lost to failed SIPPs since 2013. That’s above and beyond the amounts compensated by the Financial Ombudsman Service.
Some of the checks will be on those who introduce clients to a SIPP. Making sure that they aren’t based offshore, that they haven’t got criminal records or related convictions and whether they are regulated.
The actual investments held within SIPPs are also to be scrutinised, with checks on the ownership of the assets and the ability to reliably be able to value the assets at all times.
Advertising Standards Authority (ASA) helping out.
The ASA continues to support the FCA in rooting out scam advertising online. Not just scams but any adverts which don’t carry the appropriate risk warnings or disclosures about being unregulated, using their new AI driven Ad Monitor.
Only recently the ASA intervened to take down adverts for gold and silver investments because they didn’t carry the correct disclosures and warnings.
Consumer Duty being looked at.
It’s not just scams that are being looked at. The FCA has confirmed that it has a number of firms under investigation for potential breaches of the Consumer Duty regulations. These were introduced in 2023 to encourage better financial outcomes for clients. One area being looked at for example is the level of fees being charged to clients by advice firms.
Tax Refund scams.
Tax refunds have been a target for scammers for a long time and this might be affecting genuine claims. Data shows that there are 750,000 unclaimed PAYE refunds with HMRC worth over £650 million. Usually PAYE is adjusted automatically, but not always. Especially where there has been a change in circumstances. Maybe a change of employment leading to an emergency tax code, or a change in pension income for example. HMRC will send a letter, but you need to act to claim the refund. This is where you need to be alert to scams of course, but the average refund due is around £850.
Get more information.
If you are looking for safe and trusted online financial advice, then why not contact Christina today. We offer a free initial meeting to discuss your requirements and explain how our service works. You are under no obligation to use us after that if you don’t want to and we won’t pester you.
So why not call us today on 01282 614444 or e mail us enquiries@ccfps.co.uk or use our contact form online.
Or if you’d prefer to think about it some more, why not have a look at our Facebook page, our Vouched For page, or our Testimonials page to see what our customers think about us.
