Investment industry

Are you and your clients one step ahead of the fraudsters?

Guest authors

Investment scams are on the increase, and your clients are being contacted directly. Fraudsters are targeting the vulnerable but are you aware which of your clients may fall into this category?

There is no single way to identify a vulnerable person and vulnerability is not limited to physical or learning disability alone. Every day and familiar situations can make a person vulnerable for a period of time, such as experiencing bereavement, when they or a family member become seriously ill or when they lose a job or become a carer.

Standard Life deploys sophisticated checking techniques to help our customers identify when a contact might be a dishonest one but in the first instance, your clients need to be on their guard and aware of the dangers.

The rise of pension scams

This year the Financial Conduct Authority (FCA) has been running a ‘ScamSmart’ campaign to raise the awareness of pension scams, bringing to light the alarming facts we all need to be aware of.

Their research shows some interesting facts:

  • One fifth of over 55s (22%) believe they have been the target of a pension scam but they're staying silent about it.
  • 49% say they don't know who to report fraud to.
  • Brits are more likely to report fly-tipping (81%) than report an investment scam (63%).
  • £1.2billion - UK lost to investment scams every year, according to the FCA.
  • 3,186 reports to Action Fraud of investment scams 2015/16.
  • Over £32,000 lost on average by victims.

Fraudsters are using increasingly sophisticated techniques to manipulate people out of their hard-earned retirement savings meaning that even experienced investors are the victims of this kind of investment fraud.

Many believe they are not the ‘type’ to get caught out, perhaps letting their guard down, but as well as employing sophisticated techniques, fraudsters cold call or email targets directly too with tantalising and believable offers.

The figures are stark and the true picture could be even worse because many choose not to report what’s happened.

You can play an important role in educating your clients to be aware of the dangers and encourage any who fall victim to this type of fraud, to report suspicious activity and actual crime to Action Fraud or the FCA itself.

The FCA takes civil court action to stop illegal activity and for the most serious cases, pursues criminal prosecution. Last year, the FCA returned over £3 million to victims of unauthorised activity, including investment fraud.

Help your clients know the risks and to be ScamSmart

  • Get your business and your clients on the front foot against pension fraud.
  • Consider issuing the ScamSmart infographic to your clients.
  • The FCA has a warning list of firms to avoid. You could use this to offer a checking service to your clients, should they be contacted directly.

And if the worst happens and a client comes to you reporting a scam attempt or an actual scam, you can advise them to:

  1. Contact the FCA consumer helpline.
  2. Complete the FCA’s reporting form.
  3. Read more on the ScamSmart website – especially if you or your client has already been a victim of pension fraud.

Up to the end of September 2017, Standard Life has refused 610 transfers totalling over £23 million.

Standard Life – protecting your clients retirement

As a responsible pension provider, we’re supporting the FCA and taking part in the ’ScamSmart’ campaign and want to share their tools, so you are able to help your clients should they need it.