A series of rules and regulations designed to clamp down on pension fraud has led to scammers changing the direction of their business operations. Whilst these new methods are in the long-run likely to cause fewer problems for retail investors, there is a need to be aware of the new tricks deployed by criminals to take advantage of unsuspecting victims.
Pension Scam Cold Calls On The Decline
It is unlikely that cold calling by scammers is a thing of the past, but there has been a move away from that tactic thanks to the new regulations. In the UK, any unsolicited phone call to someone who has not opted-in to receive them has been illegal since 2018. The ability of the Information Commissioner’s Office (ICO) to issue fines up to £500,000 has resulted in a lot fewer cold calls being made. That is a big win for investors considering that in the year before the rules came into place, approximately 2.7bn unsolicited calls, texts and emails were made to the UK’s adult population.
The downside of the move by scammers away from cold-calling is that a variety of new tactics have surfaced.
Watch Out For – Underselling
Over the last two years, while asset markets ranging from stocks to crypto have posted spectacular gains, some scammers have taken to underselling in terms of performance returns. The aim is to flip on its head the idea that ‘if something looks too good to be true, then it probably is’.
Watch Out For – Clone Sites
Clone sites – those which mimic the name and contact details of a bona fide investment firm are also increasing in number. The FCA reported that in April 2020, the reports of ‘clone firm’ investment scams rose by 29% in the space of one month. This particularly devious approach can even catch out the risk-averse who follow the excellent advice to cross-reference a firm’s name to the register of authorised firms supplied by a regulator such as the FCA. One alternative is to manage your own investments from this list of trusted brokers that the Forex Fraud team has reviewed.
Pension Scams – A High Stakes Game
Reported cases of fraud could only give an indication of the extent of the problem. With many cases likely to be unreported, data relating to confirmed cases points to 253 victims reporting to Action Fraud that they had lost a total of more than £23m to pension scammers in 2017. That equates to an average loss of £91,000 per victim and big-ticket wins for criminals means they are willing to play a long game and develop a range of differing techniques.
Whilst the regulators are taking steps to clean up the industry, it is the fragmentation of the scammers’ techniques that require retail investors to be more diligent.
Crowdsourcing information about scam brokers can help others avoid falling into the traps set by disreputable brokers and you can share your experiences here. If you want to know more about this particular topic, or have been scammed by a fraudulent broker, you can also contact us at [email protected]
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