The full impact of coronavirus on the UK is not yet known, but there’s no doubt that the country has taken a huge hit to the economy, leaving many residents fearful for their finances. Unfortunately it’s during these times that financial scams are rife. Here’s how to spot them.
According to the Guardian, at the time of writing one third of the world’s population is on lockdown due to coronavirus. In the UK, all non-essential shops are closed and any person that isn’t a key worker is isolating at home. Already, millions of jobs are at risk, with many people already becoming unemployed. The government have announced a support package for employees and businesses alike, but it’s still no surprise that many are concerned about how they’re going to get by in the coming months.
Unfortunately, it’s at a time like this when many are looking for financial reassurance that the tricksters and con-men get into their stride. People may be less likely to read the fine-print of financial products, whether they are short-term loan schemes or get-rich-quick investment offers. According to the Financial Conduct Authority (FCA), this is exactly what is happening in the UK. The FCA are the main regulatory body for the financial industry in the UK, helping to ensure that financial markets are honest, fair and effective so that consumers get a fair deal. As an example, in a statement published on Tuesday the FCA said that a company called Purple Finance Cards are targeting UK residents with financial products, despite not being regulated by the FCA.
This means that this unregulated company could be luring people into an agreement which may not be legal or ethical. The statement said:
We believe ‘Purple Finance Cards’ has been providing financial services or products in the UK without our authorisation. Find out why to be especially wary of dealing with this unauthorised firm and how to protect yourself from scammers. This firm is not authorised by us and is targeting people in the UK. 1
Every year scams get smarter and more sophisticated. According to UK Finance, a total of over £50 million was lost to investment scams in 2018, with over 3,300 people falling prey to fraudulent schemes.
If you’re looking for financial or investment advice, here are some basic checks UK Finance recommend to verify the credibility of a company:
Be wary of any unsolicited approaches offering investment opportunities – genuine investment companies do not cold call people.
Check with the Financial Conduct Authority to see if a firm is authorised or registered with them before making any investment and follow the advice of its ScamSmart campaign.
Watch out for any ‘too good to be true’ investment opportunities. If you are being pressurised to invest quickly it is a sign that it could be a scam.
Contact your bank straight away if you think you may have fallen victim to an investment scam. 2
Here at Woodgate Financial Planning we pride ourselves on being completely transparent at every stage of service. All of our advisers are regulated by the FCA, many of our clients have been with us for decades, trusting us to manage, protect and grow their wealth in order to find financial freedom.
If you're looking for financial advice, why not give us a call today to find out how we can help you do the same?
sources:
1 https://www.fca.org.uk/news/warnings/purple-finance-cards
2 https://www.ukfinance.org.uk/system/files/Fraud%20The%20Facts%202019%20-%20FINAL%20ONLINE.pdf (P45)