There are a few key messages in relation to fraud that everyone should bear in mind. They are as follows:
- If it sounds too good to be true, then it probably is!
Fraudsters will invariably offer or promise huge returns on investments. This is not to say that opportunities to achieve such returns do not exist, but they are extremely rare and claims of such returns may be nothing more than a means of arousing your interest.
Fraudsters prey on our natural desire to achieve the best possible results.
- Seek Independent Advice:
Investment businesses are required to be authorised by the Financial Services Authority, such that they are "fit and proper" to operate.
As a rule, do not get involved with an unregulated organisation and do not make on the spot decisions.
- If you cannot understand what an investment involves, do not invest your money.
If a financial advisor cannot properly explain how an investment works then you should not commit to it financially.
You need to be clear about where your money will go and what sort of investment strategy is being followed.
- Do not be rushed into making a decision!
Do not make on the spot decisions and do not hand over any money until you have fully considered your options.
- Beware of cold calling.
Generally cold calling for investment business is prohibited by law so be extremely wary of any calls you may receive offering generous deals.
Cold calls can be associated with "Boiler Rooms". These are high pressure sales scams offering shares for sale that prove to be non-existent or worthless. They are largely operated from overseas. The best advice is to hang up the phone.
- Do not respond to letters indicating that you have won a prize on an overseas lottery.
These will inevitably involve requests to forward money to cover such things as administration fees so that the prize can be forwarded to you.
The prize is non-existent and you will not see your money again.
This type of fraud has many guises and may involve non-existent inheritances or requests to help someone to bring money into the country from abroad for which a fee will be paid.
- Do not respond to emails that are apparently from a bank asking you to verify account numbers and passwords.
Banks do not send out such emails and they should all be treated as suspicious.
- Keep personal and confidential documents secure.
- Always shred unwanted confidential documentation.
Such as bank/credit card statements, utility bills, and receipts using a cross cut shredder.
Bear in mind that identity fraud is a massive problem and any such documents may provide fraudsters with the opportunity to not only access your bank accounts but also to take loans in your name.
- Protect yourself from being a target of fraud:
- If you receive unsolicited calls trying to sell you shares do not buy them
- You can ask the caller whether they are registered with the Financial Services Authority; they are unlikely to continue with the call if challenged
- Ask for their details to confirm who they say they are and the firm they represent
- You can check for UK registered companies on Companies House
- If you are offered shares, an investment or a business opportunity, check on the Financial Services Authority Register to see if the person/company is FSA regulated
- You can also check on the FSA's lists of unauthorised overseas individuals and companies operating in the UK. Note: this list only refers to individuals and companies the FSA is aware of
- If an offer promises a very high return or funds to be released to you which you do not know about, this is likely to be a scam
- don't send money in response to unsolicited letters or phone calls
- dispose of any documents bearing your name and address and any other personal details carefully
- Most importantly:
IF AN OFFER SOUNDS TOO GOOD TO BE TRUE, IT PROBABLY IS!
