The official fool-proof way to spot a scam
With scams on the rise, the Financial Conduct Authority’s new tool could help protect you from finance fraudsters.
With scams on the rise, the Financial Conduct Authority’s new tool could help protect you from finance fraudsters.
Around 800,000 people fell victim to investment and pension scams from May 2023 to May 2024, according to figures from the UK’s watchdog, the Financial Conduct Authority (FCA). Which means it has never been more important to be extra vigilant when it comes to financial crimes. From being conned into investing in companies for a high return to transferring pension funds, people are being targeted in a variety of ways.
But now the FCA has launched a new online tool that aims to help people protect their finances better.
The Firm Checker tool allows users to quickly see if a firm is authorised and has the correct permissions to provide services, which can significantly reduce people’s chances of falling victim to fraud.
“Ruthless fraudsters are constantly evolving their tactics so they can steal money from innocent victims,” says Sheree Howard, executive director of authorisations at the FCA.
“Whether you’re considering an investment, pension opportunity, loan or other financial service, use Firm Checker to confirm the firm is authorised and help fight financial crime.”
Many of the 800,000 victims were approached through unsolicited social media adverts, messages or phone calls. The FCA’s streamlined consumer tool allows users to type in the name of any financial services firm and see immediately whether it is authorised by the FCA.
It also highlights the specific permissions the firm holds, so consumers can see whether it is legally allowed to offer the service being promoted, as well as directing users to the correct contact details, which helps protect against cloned firms.
The new tool is similar to the FCA’s existing register, but is designed to offer a more simple and straightforward way to check if you are engaging with a legitimate financial company, leading to more informed decisions before investing money.
Investment fraud occurs when a criminal convinces a victim to move money to a fictitious fund or to pay for a fake investment, such as promising to double your investment when money is handed over or pension funds are transferred. Fraudsters use both old and new technology to try to entice their victims to part with their money.
According to the FCA survey, those who had experienced authorised push payment (APP) fraud – where a fraudster tricks a person into making a payment to a fraudulent account – or unauthorised consumer investments or pensions-related fraud were most likely to have encountered it promoted on social media (17%) or via a telephone call (17%). A further 16% were initially approached via text message, WhatsApp or another messaging service.
As well as using the firm checker, consumers are also advised to take other precautions such as rejecting or ignoring unsolicited calls, emails or texts about investment or pension opportunities; and checking email address and numbers before providing any personal or financial information.
If you are considering making any investments, use the FCA’s firm checker tool in order to ensure that the firm you intend to use is authorised to operate in the UK and can provide the services that they claim to.
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