How to avoid falling victim to financial fraud

Fraud alert

Financial fraud continues to pose a significant threat to UK consumers. According to UK Finance, in 2018 alone, a total of £1.2 billion was lost to scams and fraud. But it’s not all doom and gloom, innovations and advanced security systems stopped more than £1.6 billion of unauthorised fraud in the same year.

Nevertheless, it remains vital for investors to stay vigilant as the finance industry continues to crack down on fraudulent activity. In this blog post, we’ll be exploring how to avoid falling victim to financial fraud; identifying the red flags to look out for and what you can do to protect yourself from becoming a target.

Red flags

1. Unsolicited contact

Scammers employ various tactics, including unexpected house calls or phone calls. Offering ‘huge returns’ or a ‘great opportunity’. Generally, it is best to avoid any contact that comes out of the blue, especially if it is over the phone. Following the ban on pension cold calls in January 2019, you should not be contacted by any company about your pension unless you have requested it.

2. Phishing

Be wary of any emails that ask you to provide sensitive information, such as usernames, passwords or credit card details. Make sure to check exactly what email address the message has come from. Scammers often disguise themselves as a reputable company, but if you look closely at the sender domain you will find random numbers or spelling mistakes.

Don’t click any links either. It’s always best to hover over a link first and check that the URL looks legitimate before you click it.

3. Feeling rushed or pressured

If you feel like you are being forced into making a rash decision then be careful, scammers will try to catch you off guard by giving you little to no time to digest what they are saying. When it comes to pension or investment scams, it is common for the scammer to make promises of large returns that are low risk. Remember, if it sounds too good to be true, then it probably is!


1. Never give out personal information

Giving your personal details to the wrong person could result in them accessing your accounts or stealing your identity. It is worthwhile signing up to a call blocking service such as the Telephone Preference Service. This will prevent cold-callers from getting in touch, reducing your chances of falling victim to a scam.

2. Use strong passwords and update your operating systems regularly

Keep your electronic devices secure by installing new updates as soon as you are notified about them and ensuring you have the latest version of your virus protection software.

Additionally, check that all of your online accounts have strong passwords. Making sure you change them regularly and avoid using the same password repeatedly.

3. Check the FCA register

The first thing you should do when you are looking for a financial adviser is to check that the firm is on the FCA’s Financial Services Register. You do not want to work with anyone that is not on this list. But remember, the FCA has stopped updating the status of 25,000 advisers until their new directory is launched at the end of this year. So, although the company will be listed, it would also be wise to get in touch with the firms on your shortlist to see if they can provide further details about the adviser’s status.

4. Do your research

If you are looking for a financial adviser then you should shop around and research all of the companies in your area. Check their background on Companies House, review their website and look for any social proof through testimonials or reviews. Some leading review sites for financial advisers include VouchedFor, Unbiased and Yell.

Helpful tool – The FCA’s ScamSmart website offers a warning list, allowing investors to check if an investment or pension opportunity is a scam.

If you would like to discuss any aspect of this article, then please get in touch with us and speak to one of our financial planners.