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Investment and pension scams during coronavirus lockdown – how to stay safe

The latest on spotting investment and pension scams and what you can do about it.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

It’s abhorrent that fraudsters are using the current crisis to trick people into handing over their money. But since the coronavirus outbreak we've seen a number of new scams surfacing designed to do exactly that.

Action Fraud, the UK’s national reporting centre for fraud and cybercrime, has confirmed that losses from coronavirus-related fraud reports, during the start of the pandemic alone (between 1 February and 18 March) reach nearly £970,000.

Scams can come in all shapes and sizes, ranging from cold calling and texting to cyber fraud, including insurance, investment, pension and charity scams. It’s important to stay financially safe and be aware of potential scams at all times. Investors lost an average of £82,000 to pension scams in 2018, which could amount to 22 years’ worth of pension savings.

The Financial Conduct Authority (FCA) is urging people to be vigilant:

Scammers are sophisticated, opportunistic...and tend to target people who are more vulnerable or susceptible to being scammed, particularly in the current climate with many more people being at home.

We are aware that scammers are targeting consumers searching for investments online, in particular through search engines like Google and Bing. Those offering or promoting products or investment opportunities found through search engines are not necessarily authorised or regulated by the FCA. You can check the FCA Warning List for firms to avoid.

You won’t normally have access to the Financial Ombudsman Service or Financial Services Compensation Scheme (FSCS) if you use an unauthorised firm and things go wrong – so you’re unlikely to get your money back.

If you have any concerns or suspicions about a potential scam, contact the FCA and Action Fraud immediately.

What are the potential signs of an investment or pension scam

Spotting a scam isn’t always easy, and with many people at the moment feeling vulnerable and eager to boost their income, the promise of generous returns could be extremely tempting.

Fraudsters are also becoming more sophisticated.

They’ll attempt to make their ‘sales pitch’ as realistic and attractive as possible. They’ll aim to build a rapport with you – sharing fake reviews, using convincing literature and websites or claiming to be regulated.

But the FCA says there are some tell-tale signs to look out for.

It’s unexpected – scammers often cold-call their victims. But they can also get in touch by email, SMS or by post, through social media or even word of mouth.

They put you under pressure – You might be told you only have limited time to act. You might be offered a bonus or discount if you act by a set date. You should always take time to consider your options and never rush your decision.

They promise unrealistic returns – to tempt you in, scammers often promise impressive or guaranteed returns. They’ll even play down the risks. If it sounds too good to be true, it often is.

For pensions, scammers might also offer free pension reviews and the chance to release money from your pension even if you’re under the age of 55, which is not normally allowed under current pension legislation.

Steps you can take to avoid investment and pension scams

Reject unexpected offers

If you’re contacted out of the blue about an investment opportunity, chances are it’s a high-risk investment or a scam. The safest thing to do is to hang up. If you get an unexpected offer by email or text, you should ignore it.

You should never click on any link in an email or text message from senders you don’t already know. And never give out your bank details if requested from suspicious or unsolicited contact. HL will never ask you for your secure number in full online. If you have any concerns about the information you are asked to provide do not continue with your log in. You can register with the Telephone Preference Service and Mailing Preference Service to reduce the number of letters and cold calls or texts you receive.

Check they’re FCA-authorised

The FCA authorises almost all financial services firms in the UK. If they’re not authorised, it could be a scam. You can check the Financial Services Register to see if a firm or individual is authorised or registered. If you are contacted by a firm you’re not familiar with you should always do this before you act.

Another tip is to always access the Register from the FCA website, not through links in emails or on the website of a firm offering you an investment. It’s possible to direct that link to a page that looks like the FCA register.

Check it’s not a ‘clone firm’

Some scammers try to deceive investors by pretending to be a genuine firm (called a ‘clone firm’). To make sure you’re contacting the genuine firm you should call their switchboard number, you can find this listed on the FCA Register. Remember scammers can try to pretend to be any company, so this should apply to all companies – including any dealings with us.

If there aren’t any contact details on the FCA Register or if the firm claims they’re out of date, check by calling the FCA consumer helpline on 0800 111 6768.

If you’re dealing with an overseas firm, you should check with the regulator in that country and also check the scam warnings from foreign regulators.

Check the FCA Warning List

Use the FCA Warning List to see if the firm is known to be operating without the FCA’s authorisation.

Even if a firm isn’t on the FCA warning list, it might still be a scam – scammers will change names and details all the time.

What to do if you’re suspicious, or believe you’ve been scammed

Contact your bank immediately if you think you’ve fallen for a scam.

If you’ve been defrauded or experienced cybercrime you must report it to Action Fraud either online or by calling 0300 123 2040.

If you've started a pension transfer and now suspect a scam, contact your pension provider straight away. They might be able to stop it.

You should also report what’s happened to the FCA either online or by telephoning 0800 111 6768.

If you’ve noticed any suspicious activity on your HL Account or think your Account might have been compromised then please contact our Online Support team immediately.

Help with the emotional impact of fraud

Falling victim to fraud can have a huge emotional impact as well as being financially crippling. Victims can often feel embarrassed and don’t want to tell people what’s happened, even though they’re not to blame.

If you need to talk to someone about how you’re feeling, you can contact Victim Support either online or via their support line on 0808 1689111. You can also contact The Samaritans at any time of the day or night on 116 123.

If a scam has left you struggling financially, you can contact Citizens Advice to help you find a way forward. You can speak to an adviser through its national phone service, Adviceline, on 03444 111 444, which is available from 9am to 5pm Monday to Friday.

Be wary of future scams

If you’ve already invested in a scam, fraudsters are likely to target you again or sell your details to other criminals.

The follow-up scam might be completely separate or related to the previous fraud, such as an offer to get your money back or to buy back the investment after you pay a fee.

Get impartial information or advice

The FCA suggest people should seriously consider seeking financial guidance or advice before changing their pension arrangements.

The Pensions Advisory Service provides free independent and impartial information and guidance. If you’re over 50 and have a defined contribution pension, Pension Wise offers pre-booked appointments to talk through your retirement options.

You can also use a financial adviser to help you make the best decision for your own personal circumstances. If you do opt for an adviser, make sure they’re regulated by the FCA.

If you have any concerns or suspicions about a potential scam, contact the FCA and Action Fraud immediately.

How secure are your pensions and investments with HL?

The security of your investments and pensions is one of our top priorities. And we’re dedicated to keeping your HL Account safe and secure.

Our Security Centre keeps you updated with the threats and issues that might affect you and your account. We explain some of the measures we take to help keep your details safe and show you the things you can do to help protect yourself. We’ll never cold call investors and if you’re ever concerned about the security of your HL Account please contact us.


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Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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