Financial scams are on the rise: Here’s how to keep your money safe

Article written by Kellands Hale, our preferred independent advice firm.

This article is not intended to be financial advice to any individual. The views expressed are those of the author and Moneyfactscompare.co.uk does not endorse the content.

In today’s world, there are plenty of threats to the security and viability of your wealth.

You might be concerned about how the cost of living crisis will affect your savings and investments, for example, and already be having conversations with your financial planner about how to mitigate these effects.

One potential challenge you could face in the coming months and years that you may not have considered is falling victim to an online scam.

Indeed, a National Cyber Security Centre (NCSC) report reveals that it removed a record-breaking 2.7 million online scams in 2021. This number is four times higher than that of 2020, showing a startling increase in the number of active scams that could put your wealth at risk.

In addition, the UK’s specialist police unit for fraud claims that the current cost of living crisis will create an opportunity for scammers to “exploit” the financial concern many are facing. For example, scammers could offer “energy rebates” by pretending to be a Government body, acquiring your financial details surreptitiously, and potentially causing a highly stressful situation for you and your loved ones.

In light of the increasing number of financial scams that could put your financial viability at risk, there are several red flags even savvy individuals might miss.

Research published by Action Fraud has provided interesting insight into human behaviour.

After pension scams almost doubled in the year to July 2021, the Financial Conduct Authority (FCA) conducted research revealing that, while only 1.1% of pension holders would take advice from a total stranger in person, 9.95% said they would accept a stranger’s advice online.

In response, the FCA encourages pension holders to “flip the context” when it comes to accepting offers or advice from strangers online. If an unknown person approached you on the street and offered you an investment opportunity with sky-high returns, would you accept it?

The likely answer is that you’d instantly feel suspicious and walk away – so it may be helpful to apply this logic to online offers you may receive, too.

Despite your awareness of the existence of scams, this research, compounded with the increasing prevalence of online fraud, proves none of us is immune to advanced financial crime in this day and age.

If you hold significant amounts of wealth in investments that you can access online, it is crucial to understand how scammers might try to exploit you.

Here are 10 red flags often exhibited by online fraudsters.

1. You are offered “guaranteed” returns on your investments
2. You receive an unsolicited email or phone call from a “financial expert” or “pension provider”
3. The person contacting you pressures you to transfer the funds “today” or threatens a fine if money is not immediately given
4. You are contacted by “HMRC” or “the NHS” claiming you have unpaid bills or, conversely, claiming you are owed money by the Government
5. The individual contacting you makes hard and fast promises, such as to reduce your tax bill
6. You are contacted from a blocked number and are unable to call back
7. You are encouraged or pressured to transfer funds into overseas accounts as an “investment”
8. You are offered a deal that is said to yield higher returns than anything else on the market
9. The person or “firm” that contacts you does not have a legitimate website, email address, or landline contact number
10. You are discouraged from seeking professional advice before making the investment or payment.

It is important to note that this is not a comprehensive list; there are hundreds of imaginative ways scammers can encourage individuals to part with their hard-earned money.

If you have been offered an investment opportunity that doesn’t seem right, or you are told you owe money to HMRC, it could be wise to contact your Kellands financial planner before going any further.

Luckily, there are ways to ensure the legitimacy of a firm or individual who presents you with an offer. Whether this is a pension transfer, an investment opportunity, or an outstanding bill you are required to pay, it is crucial to check that the source is real before you transfer any funds.

One easy way of finding out if a “firm” is legitimate is by searching the name of the source on the Financial Services Register, which holds the details of all FCA-authorised firms.

In any case, though, it may be constructive to check with your financial planner before trusting any online or over-the-phone offers you receive – regardless of an FCA certification.

No matter how convinced you are that an offer is legitimate, it doesn’t hurt to check with a professional before making significant financial decisions.

By working closely with your Kellands financial planner when opting to transfer your pension or make a big investment, you could reduce the risk of falling victim to an advanced scam. Plus, your financial planner can provide guidance on whether this opportunity might align with your goals for the future.

Get in touch

For expert guidance on how to protect your wealth from online criminals, get in touch with us today. Email us at hale@kelland.co.uk, or call 0161 929 8838.

Please note

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Kellands (Hale) Limited is authorised and regulated by the Financial Conduct Authority. FCA Registration No: 193498