interactive investor comments on Citizens Advice research and shares tips on protecting your money.
New research by Citizens Advice has revealed that more than two thirds of adults (36 million) have been targeted by a scammer since January.
Commenting, Myron Jobson, Personal Finance Campaigner, interactive investor, says: “There has been a notable proliferation of scam messages - be it via text, email, WhatsApp or on social media - since the start of the pandemic, with scammers shrouding their nefarious schemes among the increase in correspondence by legitimate organisations relating to coronavirus measures.
“For many, receiving a message from a scammer under the guise of a representative of a bank that you don’t have an account with, a courier claiming there has been an issue with an order that you did not place, and the classic personal injury claim you never made is a frequent occurrence - and there’s little that can be done to stop them.
“And with financial scams becoming increasingly sophisticated, it is important to be on your guard. When it comes to investments, anything purporting a guaranteed return is probably a guaranteed way of losing money. Even the most seasoned investor can fall victim to scams, so it is more important than ever to take care with your money and look out for the warning signs.”
Myron’s tip to avoid financial scams
If it sounds too good to be true, it usually is
There is no such thing as a free lunch when it comes to your finances. If you come across a proposition that promises ridiculous returns and downplays risk, it probably is too good to be true.
Before you commit to any offers, make sure you do extensive independent research on the company and make sure you check all the information yourself – don’t just take their word for it. There are no shortcuts when it comes to financial management, but help is available. The government’s free and impartial pension wise service is a good first port of call, offering guidance on options for those with a defined contribution pension.
Look out for the tell-tale scam signs
Scams can be difficult to recognise, but there are things you can look out for such as a dodgy looking website address, poor grammar and spelling, a lack of reliable contact information among other. And never trust anyone wanting personal information.
You can search for a company's details on GOV.UK. This will tell you if they're a registered company or not.
Cold-calling relating to pensions has been banned since 2019, but that still doesn’t stop unscrupulous individuals from using this method to scam people out of their cash. No reputable pensions firm would call you out of the blue to suggest you transfer your retirement nest egg to a better deal. When in doubt, simply hang up.
Also beware of things that signal illegitimacy. If the firm doesn’t allow you to call back, it is most likely because it is a fraudulent enterprise. Also beware of firms that only list mobile phone numbers or a PO box address on their website.
Fraudsters may try to tempt you in by offering free pension reviews. Don’t fall for it. It could be a trick to get you to share personal information.
Do your due diligence
Be suspicious of any unsolicited correspondence related to your finances. Why take the risk?
Have a look at the FCA’s ScamSmart website to see if the offer is a known scam. You should only deal with financial services firms that have been authorised by the city watchdog.
Beware of offers to unlock your pension before age 55
Schemes that offer to unlock your pension before age 55 should be avoided at all costs. These schemes, also known as pension liberation and pension loans, are trying to get you to break the law and are likely to result in you paying huge administration costs and big tax bills, in some cases leaving people with no savings for retirement.
Only in very rare case, such as very poor health, is early access to pension possible.
- While over-55s are most likely to be targeted, those 34 and under are almost five times more likely to fall victim to a scam than their older counterparts*, the charity can reveal.
- Younger people were most likely to be targeted by text or messaging service (61%), while those over 55 were most likely to be targeted over the phone (73%).
- Of all those targeted by a scammer:
- 54% were about fake deliveries or parcels
- 41% were by someone pretending to be from the government
- 12% were by someone offering a fake investment or get-rich-quick scheme
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.