Fixed Rate Bonds: Fake Investments
Scams are getting more convincing and difficult to spot. Fraudsters are increasingly using the names of well know financial companies, Aviva, Fidelity, Zurich, Aberdeen Standard Life, to front scams. Cloning websites and emails. Criminals are also buying adverts on search engine. These ads appear at the very top of the results page when you search ‘best rates’, ‘best bonds’ and ‘best ISAs’, so they instantly catch your attention. Unfortunately, because you think you've gone onto a real website, you're likely to hand your information over before sending money on to the fraudsters.
Once you visit these websites, they may ask for your personal — and possibly financial — information. Some of these fraudsters have even asked people to send a photograph of themselves holding their ID. They may encourage you to set up bonds and ISAs with them, which turn out to be fake. They may also ask you to create an online account on a fake portal to manage your investment — this allows them to steal your password so they can try to access your accounts elsewhere.
Some of these criminals have then been getting back in contact with their victims, posing as solicitors, financial advisers, insurance companies etc., and claiming they can recover their lost money. This is known as a recovery scam, designed to extort more money from victims.
How to spot an investment scam
Many investment scams cold-call customers or contact them out of the blue by text or email. Regulated and legitimate firms won’t fish for new customers this way. Ask the company to send further information in the post, so you have some facts and figures to check independently. If they are unwilling to do so, they’re likely to be fraudsters.
If you get an unsolicited call or email, check whether the firm, or the investment scheme they’re selling, is one of a number of scams highlighted by the FCA. The FCA website lists the investments and companies it has serious concerns about. However, even if the firm or investment isn’t on the list, you should still remain vigilant as new scams emerge all the time.
Always check whether the company that approached you is a regulated financial firm and don’t take the company’s word for it. Many may claim this in their marketing literature, or in their sales pitch, but check on the FCA’s list of regulated firms to ensure it’s genuine. Remember that the company might claim to be working as an ‘introducer’ for another, authorised firm, but introducers must be authorised by the FCA too. If you hand over your money to an unregulated firm, and they subsequently vanish, you have no recourse to compensation – even if they promised to invest it with a legitimate business.
Another common tactic is to insist that this offer is only available over the phone, or for a limited period. Take your time to review this, and never feel pressurised into signing on the dotted line.
Be extremely suspicious of schemes that offer ‘guaranteed’ returns, even if these are relatively modest, or a return significantly higher than what could potentially be achieved from simply investing in the stock market.
If you think the investment opportunity sounds as though it has potential, get independent financial advice first. Don’t let the company cold-calling you recommend an adviser. Seek out someone unconnected to the offer.
Remember that if you’re investing in an unregulated asset, without advice, you can’t lodge a complaint with the Financial Ombudsman Service if you later feel it wasn’t an appropriate investment for your circumstances.