A number of constituents have been in touch with me recently to express concern around financial fraud.
This is an issue that has also been in the news as an increasing number of older people are targeted, often for their pension savings. The Times reported last week that nearly £200 million has been stolen by investment fraudsters over the past year. Despite this being an eye-watering figure it may also be somewhat of an under-estimation, as people are sadly often too ashamed to come forward with complaints. I wanted to share this information, and some of the ways in which you can take action to try and protect against fraud.
There appears to have been a significant rise in the targeting of pensioners by fraudsters ever since pension changes came in to effect in 2015 that allowed people to access their savings from any time after becoming 55. Currently, one of the more prevalent methods of fraud is the creation of fake ‘clone’ companies that resemble well known or trusted brands. These clone companies then approach people in retirement and offer them an attractive investment proposition. Many people have been tricked into investing in companies or funds that effectively do not exist.
Towards the end of last year, the Payments Systems Regulator (PRS) published an interim report on progress made in relation to their response to a super-complaint by Which? Magazine. This complaint raised concerns over how little protection there is for people who are tricked into transferring money to a fraudster. One of the suggestions that this report included, was that of a potential reimbursement scheme. The Financial Conduct Authority (FCA) is currently monitoring responses to this interim report and I will ensure to keep an eye on the final outcome, and see what further steps could be taken to help people who have fallen victim to these crimes.
When it comes to precautionary steps, the FCA has a comprehensive guide on how to avoid investment scams here. Advice includes; rejecting unexpected offers, checking whether a firm is FCA authorised, and checking a firm is not a ‘clone firm’. If you have any doubt as to whether the firm you are talking to is genuine, you should check the FCA’s online register. It is important to only access the FCA’s register via its own website, as links included in an email to you may lead you to a fake site. I personally think that the old adage "if it’s too good to be true." is truer now more than ever. It is always better to be overly cautious, rather than risk getting caught out.
If you have been a victim of a crime such as this, and you live in the constituency of Washington and Sunderland West, then please do not hesitate to get in touch with me.