How to protect your investments from scams

Both the Financial Conduct Authority (FCA) and the Financial Ombudsman Service (FOS) offer advice and help on fraud and scams. 

The FOS deals with thousands of complaints regarding frauds and scams each year and the scams the FOS reports are constantly involving. The circumstances are wide-ranging, from disputed card transactions and cash-machine withdrawals to online banking fraud and identity theft.

The FOS states, that If you are not happy with the response from your bank or payment provider you can complain to the FOS and they will investigate. 

The FCA is behind the ScamSmart campaign - where there is a huge array of information to help you avoid investment and pension scams.

The FCA lists the following areas that are not regulated and therefore the investment is not protected by the UK’s Financial Services Compensation Scheme and if something goes wrong you are unlikely to get any money back. 

• Bamboo
• Binary options
• Bonds
• Carbon credits
• Cryptocurrency
• Diamonds
• Foreign exchange
• Gold
• Graphene
• Hotels
• International forestry
• Land for development
• Land overseas
• Overseas agriculture
• Parking
• Precious metals
• Storage
• Student accommodation
• Sustainable energy
• UK forestry
• Wine
• The FCA regulates stocks and shares. If someone arranges or advises to buy or sell shares you should check that they are authorised on the FCA register. If they are not, it's probably a scam.

 

Financial services register

Do not accept pension or investment advice from anyone except a qualified and FCA regulated financial advisor. Always check the FCA register to make sure the advisor or firm you are dealing with is authorised.

You can search for a firm or individual here.

All advisors on Regulated Advice have been checked and are approved by the FCA.

Never be tempted by unsolicited contact of any kind. A legitimate firm will never contact you without you having arranged it first. 

If we put you in touch with an advisor, we will make sure that you know who will be contacting you so that you can ensure it is the correct person/company that contacts you.

Social media and advertising

Social media sites and online searches have increasingly been the areas where scammers operate in recent years. and if it's about an investment or pension opportunity, check for signs it’s a scam.

You should treat the offer with extreme caution if there’s:

• Pressure to invest (eg time-limited offers)
• Downplayed risk of losing your money
• Promised returns that sound too good to be true

 

In response to this, as of September 2021, to show financial services ads of any kind in the UK on sites such as Google Ads or Microsoft Advertisers must demonstrate that they are authorised by the UK Financial Conduct Authority. 

This includes a verification process that all advertisers of financial services must follow. Financial advisor firms must first seek FCA verification for themselves before submitting websites that they wish to use, such as Regulated Advice. 

Only once these steps have been completed can a company advertise financial services. 

This should help the FCA with the supervision and prevention of consumers being hurt by fraudulent companies and scammers. 

There are of course still many sophisticated scams out there that don’t rely on advertising. 

Warning signs to look for

• Scams and frauds come in so many forms these days, but some handy tips can help you avoid them.
• Avoid cold calling or texting. Since 2019, there has been a pension on cold calling ban.
• If you can not contact the firm yourself do not do business with them.
• If couriers are involved or you are pressured to make a quick decision.
• Where contact details are only mobile phone numbers or a PO box address.
• If they claim you can access your pension early before the age of 55.
• Claiming to know of tax loopholes or promise extra tax savings.
• Offer high rates of return but claim it’s low risk. Investments can go up as well as down.
• Offers free pension reviews.
• Offer legal loopholes or government initiatives.

 

Get expert advice

It still makes good sense to consult a professional financial adviser before making any big decisions as it minimises the risk of falling victim to scams. We can help you connect with a regulated advisor. 

Let Regulated Advice match you with a financial advisor for expert advice.