Ken Davy  

Knowledge is power in the fight against scams

Ken Davy

Ken Davy

There was a time when the only scam you had to worry about was a badly spelled email from a deposed African prince seeking to share his fortune with you, provided you first sent him £50,000 to help him get it out of the country.

Sadly, with the arrival of the internet and social media, the dangers have grown a thousand times greater.

Scams and ‘fake news’ are everywhere, and we have a responsibility to put our clients on red alert.  

Gone are the days when if you heard a news story by word of mouth, you took it with a pinch of salt until it could be independently verified, preferably by the BBC.

The impact of social media now means the line between reliable news, gossip and propaganda is blurred, often making it very difficult to spot the difference between credible news and lies. 

The world of financial services is not immune to ‘fake news’ scams, which are increasing in sophistication.  

The latest to hit the headlines have involved ‘endorsements’ from trusted celebrities including Martin Lewis and Deborah Meaden, offering investment opportunities that promise to multiply the original investment within a matter of months.

Of course, the celebrities have not endorsed these schemes, and are horrified to discover they have been unwittingly linked to such unethical activity.

However, by the time they are made aware of the scams, it is often too late for the duped investors to reclaim their money.

Social media sites are trying to take action to keep scammers at bay, but it will be a lengthy and gradual process.

So, what can be done to protect consumers? The key lies in education, and ensuring people have access to trusted information on financial services.

It is important to highlight the prevalence of social media scamming to clients, and emphasise that if something looks too good to be true, it probably is.

Hopefully, the strong relationship you already have with your clients means they would speak to you before making any decisions.

I also think the government and regulator need to educate the public on the potential financial dangers online.

The potential consequence of your clients not being on ‘red alert’ and falling for one of these scams could be the destruction of a lifetime of saving in an instant. 

Ken Davy is chairman of SimplyBiz group