It seems that the warnings about scams are now never ending. If it does it’s because they are on the increase. The latest figures from the Financial Conduct Authority but the number of warnings issued so far this year at 1,031 which is 80% up on this time last year. It seems that lockdown hasn’t just given many people extra time to work on home improvements and gardening, it’s also given the online criminals the incentive to increase their activities because more people are at home using the internet very day.
One of the newer tactics for scammer is cloning. Cloning is where the scammer tries to take on the appearance of an existing company or brand. By pretending to be someone else (company) they hope to lure you into a false sense of security. Of all the warning issued by the FCA so far this year, 401 have involved cloning scams – that is almost 40% – so it’s a big problem.
The best way to spot this type of scam is to be on your guard and check the website address in your browsers search bar very carefully. For example https://ccfps.co.uk/news/the-problem-with-claims-companies/ what you are looking for in particular is the first bit which is the name of the originating website, in this case //ccfps.co.uk/ that’s the bit to check. Ask yourself is the website address of the company I think it is? This is where the tricks are. The web address might look right but on closer inspection you can often see that it isn’t. It might say something like //christinaclegguk/ for example making you think it was from Christina, but that’s the trick to lull you in, because the real website address is ccfps.co.uk. Or the trick in the website address might be even smarter, for example //ccpfs.com/ where just one of the letters is switched around. At a glance it might look right, but on closer examination its clearly wrong. This is the level of close scrutiny you need to pay to e mails asking for your financial or personal details. That’s the key as well. What are you being asked to disclose online? If its sensitive information that should ring an alarm bell. Remember, if in doubt ring the company for confirmation its always better to be safe than sorry.
As well as taking your own precautions, the FCA is also looking at ways to help to protect you online as well. Progress may be on the horizon with the upcoming Online Harms legislation expected next year. One of the measures that would help is if search engines were held accountable for allowing scam websites to operate on their platforms. If Google for example was held responsible, I’m sure we would see a dramatic reduction in online scams. Let’s hope this happens, but until then stay alert.
As if to illustrate the issues we face, Financial Adviser ran a story this week (12/11/20) about the difficulties facing both consumers and the regulator. The article was a follow up to a number of cold calls from a company calling themselves The Insurance Review Centre. Cold calling in financial services has been banned for many years now, but still it seems that the process continues. Several concerned citizens contacted Financial Adviser to highlight the issue and so their investigative journalists went to work. The number being used was a Runcorn number, but despite their efforts there was no record of the company, not online or listed in the area. The journalists spoke to the different people within the company on numerous occasions but every time they failed to get any details about the company itself, either its name, registration number or any FCA number. The result of their efforts just highlights how difficult it can be to identify a scam company. Yes, the attempted scam was avoided, but the culprits are still out there and no nearer being closed down or prosecuted because no one can find out who they are! The matter has been passed to the FCA and the Information Commissioners Office to investigate further.
Not surprising given that a recent survey by Interactive Investor found that 13% of people said that they had been scammed, rising to 20% in the over 75’s.
FT Adviser still haven’t managed to track down the people behind The Insurance Review Centre but have now uncovered another potential scam. A number of advisers have reported receiving cold from a company called Guardian Life. This time the calls seem to be about funeral plans, using the COVID-19 crisis as the premise to talk about the importance of Funeral Planning. Although not regulated by the FCA, the nature of the cold calls is under investigation by the Information Commissioners Office. The issue with Guardian Life seems to be widespread as the number of telephone look ups for their number is now over 11,000!
There is always a flip side, however.
In an effort to detect scams and protect customers, its now being reported that some providers, particularly pension providers, are overusing the “red flag” warning system and creating delays to customers pension transfers. Where transfers used to take between two weeks and two months, there are reports of them now taking up to six months, particularly where the transfers are into Self Invested Personal Pension schemes. These delays can have serious consequences if transactions can’t be completed because of the delays and consumers can lose out sometimes causing significant financial losses.
This has already been looked in parliament as we’ve already reported.
As always, striking a balance and using common sense seems to be the required solution. Advisers are suggesting that there should be central database of regulated advisers and approved schemes to reduce the need for the delays in investigating some transfers, which sounds like a good place to start.