A guide to help older people avoid falling foul of fraud has been launched, which advisers could find valuable to use with vulnerable clients.
The cost of fraud to the UK economy is estimated to be in excess of £1bn, according to KPMG, with unwitting consumers frequently falling victim to crimes that knock confidence in providers.
In 2015 the Financial Ombudsman found four in five phone scam victims were aged 55.
'Scamwise: Spotting, avoiding and reporting scams’, has been produced by older persons charity Independent Age to raise awareness of some of the more common tactics of fraudsters.
Tips include advising people not to respond to pressure to make on-the-spot decisions, or pass on financial details or transfer money to an unknown party in response to unsolicited contact from a third party.
It also advises people to seek expert advice from an IFA and to check the FCA register if they have any concerns.
The guide has a handy checklist advisers can give to clients who they feel may be at risk of being targeted by scammers.
It could be a scam if -
1. You’re contacted out of the blue – for example, you receive an unexpected message from a person or company you’ve never heard of, or from what seems to be a familiar company but asking for something unlikely.
2. You’re told to take urgent action – tight deadlines and ‘make sure you don’t miss out’-type language are designed to pile on the pressure and stop you from thinking clearly. Scammers might try to make you panic by suggesting you’ll be at risk legally or financially if you delay.
3. What it says is unlikely – if it sounds too good to be true, it probably is. For example, you might be told you’ve won a prize draw you don’t remember entering, or be offered an investment opportunity with returns that sound improbably good.
4. You’re told to keep it secret – be suspicious if you’re asked not to tell anyone else, or told not to ring an organisation like your bank to check what you’re being told is accurate. This can stop you sharing information with other people who might notice something suspicious.
5. The communication is unprofessional – bad spelling and grammar, and overly familiar or odd language, are common in scams. This is a deliberate tactic to target the most vulnerable people, who might not notice these errors. Scam communications might use vague or unlikely-looking contact details, such as a mobile phone number, a PO Box, or an email address that’s different to what you would expect.
6. You’re asked to pay money upfront – for example, for goods or services that won’t materialise, to release a non-existent prize they claim you’ve won, or to claim a non-existent inheritance.
7. You’re asked for personal or banking information – for example, your passwords, bank account information, four-digit bank card PIN, or National Insurance number.
A communication doesn’t need to tick all of these boxes to be a scam – for example, some may look very professional and genuine.
Independent Age spoke to older people about their experiences to help inform the guide.
One such case involved Agnes, an independent minded 91 year old who lives alone and lost tens of thousands of pounds to criminals who repeatedly phoned her to sell shares that were worthless.
Her daughter and son-in-law only realised what was happening when Agnes asked to borrow £4,000 to make a further payment to someone offering to buy back the shares.
Although the flood of money to the scare scammers was stemmed, Agnes has subsequently been plagued by other fraudsters, as her details have been shared among criminals on a so-called ‘suckers list’.
Darren Cooke, chartered financial planner, Red Circle Financial Planning, who launched a petition calling for the government to ban financial firms from cold calling people, said: “Many people advisers will come into contact with will be engaged enough in personal finance to be alert to the possibility of scams, although I know of some advisers whose clients have turned up with some hair-brained scheme.
“Advisers should reinforce the key messages about scams without scaring their clients. Simple advice, such as always put the phone down on cold calls and delete unsolicited emails undoubtedly helps.”
