Times of crisis can provide opportunity. We see this in the world of investments and pensions, where lower asset prices can present an opportunity for further investment.
Unfortunately, there are those that see an opportunity for personal gain at the expense of others.
Below are seven important checks you can make to help protect yourself, but first here are four financial scams that have already been seen by the Financial Conduct Authority (FCA) that you should be aware of:
1) Scams Exploiting your Financial Concerns
Coronavirus has caused most of us to worry about our finances. This can make us more likely to look to credit to support ourselves.
There have been some fake lenders who ask for an upfront fee for credit card and loan applications. You’ll pay the fee and won’t receive the credit.
Stay well clear. Remember there’s legitimate support available for many, and I’ll be writing about the help available in another blog.
2) ‘Good Cause’ Scams.
This could be a proposal for you to invest in hand sanitiser, pharmaceutical treatments or the manufacturing of protective equipment to assist with the Coronavirus pandemic.
These scams normally come with the promise of a high return, but you’ll likely lose your hard-earned savings instead.
You can see why some have been caught out as the subject matter is relevant, relatable and they make it look like it supports a good cause.
3) Clone Firms Scams
Some scammers have claimed to represent authorised firms.
They’ve presented themselves as Claims Management Companies, insurance companies and credit card providers, amongst others.
They could ask for your bank details or request an upfront fee to reimburse you for losses due to Coronavirus – maybe a postponed wedding or an investment loss.
They may look legitimate, but you could pay their fee and not receive anything.
4) “Bank in Trouble” Scams
There have been cold calls, emails, texts and WhatsApp messages claiming your bank is in trouble because of the Coronavirus.
They’ll push you to transfer your money to a new bank to ‘protect’ it.
It certainly won’t protect it and you’ll lose out.
There’ll be many more than those listed here, and many are sophisticated and believable.
You may be asking how on earth are you supposed to protect yourself?
Here’s a key list you can follow:
1) Use the Financial Services Register.
All financial services companies must be authorised by the FCA, including lenders and insurance companies.
If the company is not on the register, they may not be genuine. You can access the register by clicking here.
2) Check the FCA’s warning list.
This shows known companies to stay well clear of. You can access that here.
3) Beware adverts online and on social media.
Cross check the advertising company using the register and warning list.
4) Don’t click on any links or open emails if you don’t know the sender
If you’ve had no contact with them before, don’t open the email.
5) If someone is rushing or pressuring you, this is often an indication that something isn’t right.
Take the time you need to make any financial decisions.
6) If you’re called by a firm unexpectedly, use their contact details on the register.
This should tell you whether they’re an authorised firm. To reiterate, all financial services companies must be authorised by the FCA.
7) Avoid giving out personal details.
This could be bank account or policy numbers.
Be vigilant. If something seems too good to be true, it often is.
Knowing how to identify potentially fraudulent activity and knowing what financial scams have been seen already is invaluable to try and avoid getting caught out.
If in doubt, reach out to a regulated firm or financial adviser and they may be able to help you.