INVESTMENT scams have increased by 27 percent in the last year alone, with each scam seeing thousands of pounds being lost by vulnerable or beginner investors.
Managing director of Woodward Financials, David Woodward shared his checklist to avoid be scammed and what to do after being scammed with Express.co.uk. “With the average loss per pension transfer scam being £91,000, would it surprise you to know that one in eight people would trust an offer of a ‘free pension review’ from someone claiming to be a pension adviser?”
Mr Woodward noted that scammers will generally target people that are too trusting such as elderly, vulnerable or young investors.
These scammers will pressure the potential investor to act quickly and can be incredibly convincing and relentless, and once someone has fallen victim to a scam the likelihood of them being targeted again increases.
How to spot a scam
“So do not respond to text messages, do not answer emails from someone you do not recognise, or answer your phone to an un-stored number or click online adverts with an attractive offer and you will be a long way to not being one of those many thousands being scammed, but it is just not that simple, especially when you see the results from a recent survey of 1000 consumers,” Mr Woodward advised.
“Recognise time-limited offers as a neon light to a potential scam.
“Alarm bells should start ringing if the opportunity is one of the following nature: investment in overseas property or land for development, renewable energy, bonds, forestry, storage units, precious metals, diamonds, hotels, parking, shares, student accommodation, binary options, crypto-currency, wine, bamboo or carbon credits.”
“Reject an unexpected pension offer.
“Check who you’re dealing with before changing your pension arrangements.
“Don’t be rushed or pressured into making a decision about your pension or making an investment.
“Consider getting impartial independent financial advice, do watch out for a ‘clone firm’ or information service, a common scam tactic is to pretend to be a genuine FCA authorised firm.
“Do not download any program onto your computer to give them control.
“Do not send money via the post.”
Alongside the pension transfer loses, only 38 percent of those looking to change their pension are willing to speak to a financial adviser.
Of this small minority, people are nine times more likely to go favour online instead of in-person advice.
“Would you trust a stranger in a pub offering you ‘free financial advice’? I would hope not. So just because you are in the safety of your own home and at your most relaxed, do not let your guard down.”
Many that do go for financial advice can also end up in the grip of a scam artist, one simple way to vet a potential adviser is asking whether they are independent.
The financial services industry is far more regulated than it was 30 years ago, and independent advice is the gold standard that investors should be speaking.
Mr Woodward added: “Being an independent financial adviser, I never use the words ‘safe’ or ‘guaranteed’ and when giving investment advice.
“We always use the disclaimer such as ‘The value of investments may fall as well as rise. You may get back less than you originally invested’. If you see the word ‘safe’ it’s not safe, if you see the word ‘guaranteed’ it’s not guaranteed.”
Who to contact
If you believe you’ve been a victim of fraud or attempted fraud contact Action Fraud on 0300 123 2040 or visit www.actionfraud.police.uk.
“If you need help checking call the FCA Consumer Helpline on 0800 111 6768 NewRegister.
“Scammers are getting more creative as technology improves and a good resource on the Financial Conduct Authority website is ‘Scam smart’, spend a little time reviewing the trending scams doing the rounds: ScamSmart.”
Woodward Financials is an independent advisory firm available to help investors find the correct investors for them and avoid the pitfalls of investing.
Mr Woodward also shared a case of scamming he had been called upon to look into a few years ago.
“A scam that springs to mind was just over 10 years ago, I received a phone call from someone we will call John who had apparently won £4.1 million on the lottery.
“It was clear that this was a rather complex and lengthy scam conducted over a few years, John had been buying lottery tickets of around £25 per month with the odd £50 win for years, but no more than the value he had spent over the previous months all designed to draw him in and win his trust.
“To claim the prize, there was £75,000 of tax to pay before John would receive the winnings.
“After going through the list of items he wanted to buy for himself and sweet gifts he would like to make, it was heart-breaking to tell him that I suspected it was a scam and he should inform the police.”