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Cold calling banned to fight fraud

VICTIMS of investment scams are hoped to come under better protection from losing their life savings once new government measures to ban cold-calling anyone about financial products are introduced.

The prime minister Rishi Sunak said, “Scammers devastate lives and livelihoods. We have to prevent fraudsters from infiltrating their way into people’s lives in the first place.”

Cold calling is a common method used by con artists who trick people into buying fake investments as well as insurance and loan scams. Typically, an individual is tricked into making a payment to an investment that doesn’t exist, with hard-sell tactics.

Fraudsters will impersonate genuine firms and create trading platforms which appear to give the customer the ability to speculate on the value of assets, often cryptocurrency. Some investment scams may involve the actual sale of an asset but at a significantly inflated price.

The new measures include simpler route for reporting fraud online, with reduced waiting times and an online portal to allow victims to get real-time updates on the progress of their case.  A new National Fraud Squad will be created, with 500 specialist investigators aiming to target fraudsters, stopping them in their tracks. So-called Sim farms (the technology that allows scammers to text thousands of people at the same time) will also be banned.

Cold calls about pensions were banned in 2019 after a rise in fraudsters targeting pensions was recorded. After the pension freedoms were introduced, allowing everyone to access their retirement savings at the age of 55, criminals targeted this age group, persuading them to transfer their pension which led many people to lose their life savings overnight.

Fraudsters convince people to hand over their savings to be invested elsewhere – usually in non-existent schemes. Many fraudsters take the time to clone the websites of genuine pension firms and extract money by pretending to be part of that firm. In all cases fraudsters can be very professional in their approach to convince you that their proposition is genuine.

Fraud is now the most common crime in Britain, representing 41% of all offences, according to Home Office figures. One in 15 people fall victim to fraud each year, costing members of the public a combined £7 billion per year.

Stay alert

Fraudsters often come up with new scams based on real stories that are reported in the news, which helps make their scams more convincing.

Always be wary of an unsolicited call or email from someone offering an investment opportunity – especially where they insist that this offer is only available for a limited period.

Take your time to review any new investment opportunity and only invest if you’re absolutely sure it’s suitable for you. Remember the old adage – if it sounds too good to be true, it is too good to be true.

You can check whether the firm, or the investment scheme they’re selling, features in a long list of scams highlighted by the city watchdog, the Financial Conduct Authority (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 bear in mind that new scams emerge frequently. If you believe the investment opportunity sounds legitimate, seeking independent advice would be prudent. But ensure you consult someone independent, rather than someone recommended to you by the company that approached you.

Remember that if you’re investing in an unregulated asset, without advice, you lose any consumer protection as you won’t be able to lodge a complaint with the Financial Ombudsman Service if you later feel it wasn’t an appropriate investment for your circumstances.

Photo by Warren Wong on Unsplash


About the Author:

Holly Thomas
Holly Thomas is an award-winning financial journalist and former Deputy Personal Finance Editor at The Sunday Times. She writes across all areas of personal finance and consumer issues, specialising in investments, mortgages and property. Previously she worked at the Daily Express and Sunday Express as Money editor and also at Financial Times Business. Holly was voted Freelance Journalist of the Year at the HeadlineMoney Awards in 2016. Her work can be seen in national press including The Times, The Daily Telegraph and the Daily Mail. Follow Holly on Twitter: @holly_thomas_

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