Advanced fee fraud is now the scam people contact the Financial Conduct Authority about most.
A total of 33 per cent of enquiries about scams relate to this after a 42 per cent increase in recent months.
A typical example of this type of scam is a loan fee fraud where consumers are contacted with the offer of a loan and are asked to pay one or more advance fees to secure the loan but no loan is ever provided.
Scams made up 13 per cent of the 106,800 enquiries to the FCA’s consumer contact centre between 1 December 2015 and 30 November 2016.
The subject consumers contact the FCA most about relates to consumer credit and “non-product enquiries”, with 17 per cent of all contact made about these issue each.
“Non-product enquiries” are those about the work of the FCA and about financial services firms which do not relate to a specific product.
One of the practices that consumers have been contacting the Financial Conduct Authority about most in recent months is binary options.
A binary option is a financial option in which the payoff is either some fixed monetary amount or nothing at all.
While binary options theoretically play a role in asset pricing, they are prone to fraud and banned by regulators in many jurisdictions as a form of gambling.
A total of 17 per cent of all investment product-related enquiries to the FCA were about this type of trading.
Enquiries about investment products is the third largest category of contact to the FCA’s consumer contact centre, making up 14 per cent of the total.
An emerging issue the FCA has identified is the number of contact consumers receive about non-regulated bonds, where the investment is directly in the company, and there is no third party involved.
Of the people who contact the FCA, nearly two thirds were over 45 years of age and around two thirds were men.