Email, phone call and text message scams have been around for years but there seems to be an ever-increasing number in circulation of late. Whether it’s text messages asking for payment charges from ‘Royal Mail’, to offering you support and advice on creating lasting powers of attorney, scams are becoming more and more sophisticated all the time, even going as far as cloning investment firms.  To talk to us about our Estate Planning Solutions, for advice on Trusts, Lasting powers of attorney, or our Will Writing Service, get in touch today.

While it’s always been important to be wary of unsolicited contact claiming to be from financial providers, the recent increases mean just about anyone is likely to be targeted. 

According to the BBC, victims lost an average of £45,242 last year after investing with fraudsters imitating genuine investment firms. More than £78m was lost in total and reports of clone firm investment scams rose by 29% in April (at the time of the first national lockdown) compared with the previous month.

How Do Investment Scammers Work?

Fraudsters use increasingly sophisticated and elaborate methods to trick ordinary people out of their cash. To appear legitimate, they often steal the identities of genuine, reputable companies, which is known as ‘cloning’. This way, victims think they are dealing with the genuine, often well known, firm. Criminals often target their victims by cold calling and using high-pressure sales techniques to persuade them to part with their cash. There is also a technique called ‘spoofing’ during phone calls which makes the number they are dialing from seem genuine, as if it were from your bank, when it isn’t. It’s also not unusual to see scammers use social media, email or even letters to hook in their victims. In most cases, the crooks will try to force the victim into action by claiming there is only a small window to invest before the opportunity disappears.

How Do I Spot Estate Planning Scams?

Investment scams are often difficult to spot because they’re designed to look like genuine investments. The scammers may use professional looking websites and documents and sound personable and knowledgeable if they call you. However, there are several tell-tale signs that suggest an investment opportunity is a potential scam or at least, risky, such as:

  • Companies that contact you unexpectedly about an investment opportunity ie: cold calls, emails or follow up calls after sending out a promotional brochure.
  • They pressure you with a time-limited offer, e.g. offer a bonus or discount if you invest before a set date.
  • Cold callers downplay or omit info about the risks to your money, e.g. they talk about how you will own the actual assets they may sell if the investment doesn’t work as expected, or use technical jargon to mislead you.
  • Scammers might promise you enticing returns that sound too good to be true, e.g. offer much better interest rates than you could possibly get elsewhere.
  • They call you repeatedly and keep you on the phone a long time.
  • They may say the offer is only available to you or even ask you not to mention anyone else about the fantastic opportunity.
  • Contact details you are given, or found on their website are only mobile phone numbers or a PO box address.

How Do I Avoid Estate Planning Scams?

  • Reject cold calls. If you’re called about an investment opportunity, just hang up.
  • If you think an investment or pension opportunity could be a scam, use the Financial Conduct Authority’s ScamSmart test. After just a few short questions, the test will tell you whether or not you’re at risk of being defrauded.
  • Check that the investment company is on the FCA Financial Services Register.
  • Never feel pressured or rushed into making a decision. Always seek independent advice before investing any money at all, ideally from an Independent Financial Adviser who is authorised by the FCA. 
  • Check the FCA’s list of unauthorised firms and individuals.
  • Some scamming companies are based overseas and may not be regulated. It makes it much harder to get your money back too if you do fall prey.
  • If you think you’ve spotted a scam, report it so others don’t fall for it. You can do that by calling Action Fraud on 0300 123 2040 or by using its online reporting tool.

To talk to us about our Estate Planning Solutions, for advice on Trusts, Lasting powers of attorney, or our Will Writing Service, get in touch today.

Further Advice

  • As a rule, never act on instructions from an unexpected email, text or phone call
  • Do Not follow any links directing you to a website asking for payment, financial details or personal information. 
  • If you receive a message that you think may be valid, contact the sender directly (not through the contact details you received the request from), confirm that the message was from them, and make sure you are completely comfortable with what is being asked before taking action. 
  • Use a trusted source to look them up if need be.  Never reply to the text or email directly.  
  • Never feel obligated to give these people your time, never mind your money.
  • Don’t invest because the seller gives you something for free; they count on those freebies to guilt you into buying what they are selling.

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