Final set of tips to help you avoid becoming a victim of fraud

This is my final post in a series of three delivering advice on how to protect yourself against investment fraudsters.

Statistics shared by Action Fraud in November last year illustrate the scale of the problem. Between September 2019 and September 2020, Action Fraud received just over 17,000 reports of investment fraud, amounting to £657.4m in reported losses. This is a 28% increase when compared to the same period last year.

In January this year, they reported that victims of ‘clone investment firms’ lost on average more than £45,000. ‘Clone firms’ are set up by fraudsters using the name, address and ‘Firm Reference Number’ (FRN) of real companies authorised by the FCA. Something to be on the lookout for.

Below are my final two tips.

7 - Check the custodian

Ideally, your adviser has an independent custodian to hold your investments rather than acting as his or her own custodian — à la Bernie Madoff, the notorious financial advisor who defrauded clients through a multibillion-dollar Ponzi scheme. Check if they use an independent administration and nominee company and that any cash held within portfolios is held on trust in segregated client money bank accounts.

8 - If you’re suspicious, report it

You can report the firm or scam to the FCA by contacting their Consumer Helpline on 0800 111 6768 or using the reporting form. If you’ve given your bank account details to a firm you think may be operating a scam, tell your bank immediately. If you’ve agreed to transfer your pension and now suspect a scam, contact your pension provider straight away. They may be able to stop a transfer that hasn’t taken place yet.

I really hope that these posts have been helpful and if the result is one less person falling victim to investment fraud, then it will have been a very worthwhile exercise. Just a reminder, you can view the full list of tips as published by What Investment magazine here. Finally, below are some sources of additional information and guidance.

FCA Be a ScamSmart Investor



Important information

The contents of this article are for information purposes only and do not constitute advice or a personal recommendation. Investors are advised to seek professional advice before entering into any investment decisions. Please also note the value of investments and the income you get from them may fall as well as rise and there is no certainty that you will get back the amount of your original investment. You should also be aware that past performance may not be a reliable guide to future. performance.

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