A long-standing client recently approached Condies Wealth with a highly competitive offer for cash savings, understandably they were tempted.  These days with low interest rates, people are looking for savings rates that are more competitive and can offer to beat inflation.

The product being offered looked like it came from a well-known investment company, the branding of the communication was on point and contact details were correct.  

On the face of it everything looked perfectly legitimate.  The client, looking for advice, forwarded this on for us to find out more…

What immediately struck me was two points.  

1. Firstly, I was not aware this company offered cash savings rates, as I was only familiar with them offering investment options.  

2. Secondly, the savings rate of close to 3% looked too good.  I therefore approached the company direct via contact details I knew were correct and they confirmed that indeed the product was a scam and had no connection with them.

The scammers responsible for this are slick, make no mistake.  In these turbulent times they are constantly looking out for any opportunity to part people from their hard-earned money.  

7 lessons we can learn from this

1. Be wary of any opportunity that comes your way which is unsolicited.

2. Be wary of people offering a free financial review.

3. Make sure you know who you are dealing with.  As mentioned above, scammers are clever and will pretend to be bona fide companies.  You can confirm companies are regulated through the FCA by checking the Financial Services Register.

4. Do not feel rushed or pressured, for example a company may offer a special offer for a limited time.

5. If something is too good to be true, it likely is.

6. Do not worry about being rude.  Many scams come from people being too trusting or worried that by saying “no” they are being rude.

7. If you are in any doubt, like the client mentioned above, contact a regulated financial advisor.  One quick email to us ended up potentially saving them tens of thousands of pounds.

Remember that scammers could just take 24 hours to wipe out a lifetime of savings, so Staying Alert (I am sure I have stolen this phrase from somewhere!) could pay significant dividends.  Lower rates of interest/growth are better than losing your money.

Some of the top scams as reported by the FCA in September of 2019:

1. Boiler room schemes

These scams promise investors an impressive return but deliver nothing but a big loss.

You get a call out of the blue offering you an investment opportunity with high returns.  You will most likely be told that you must act fast and transfer your money straight away.  It is common for victims to part with huge sums of money.  The Financial Conduct Authority (FCA) does not authorise boiler rooms, so if you hand over your cash, it might be the last you see of it.

2. Phishing scams & smishing scams

Phishing (email scams) and smishing (texting scams) are the most common.  Fraudsters pose as someone official, such as your bank or building society, and send you an email or sms asking you to click a link and verify your account and password details.  This is a fraudster contacting you, who can read the information you type in, should you fall for their trick.

This information is then used to raid your account.  If you lose money this way, you will not get it back. 

Also look out for any suspicious-looking email addresses and email attachments and do not open anything you are not sure about.

3. Pension liberation schemes

Scammers are bombarding people aged 55+ with bogus investment opportunities to try to get hold of their pension savings.  One of the most common scams since the pension freedoms were announced involves alleged investment opportunities abroad. Consumers have been offered free pension advice or investment opportunities by phone, text, or email.

Low interest rates have tempted people to take extra risks, making them vulnerable to such fake investments.  Fraudsters can approach you by post, email, or phone.

4. Homebuying fraud

This con intercepts cash transferred as a home deposit to a solicitor in the lead up to exchange and completion.  A computer hacker monitors emails sent between a solicitor and client.  When a house sale money transfer is about to be made, the fraudster emails the homebuyer pretending to be the solicitor and tells them the details of the law firm’s bank account have changed.  The unsuspecting homebuyer sends their cash to the new account, where the fraudsters withdraw it.

5. Freebie scams

Seemingly free trial offers for products are duping consumers out of millions of pounds a year.  To get the freebies, you need to enter your card details – although you are told you will not be charged for the introductory period.  In fact, this free trial scam means you are often signing up to an expensive monthly subscription that is very difficult to get out of.  Once this type of billing is approved – known as ‘continuous payment authorisation’ – money can be taken without any further contact.

If you’re looking for advice on something you suspect to be a scam or just need general financial advice, please contact me on mark.houghton@condieswealth.co.uk, through Twitter at @FinAdvMark or LinkedIn