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Pandemic created 'perfect storm' for scammers to hide

 

The coronavirus crisis has created a "perfect storm" in which scammers can target victims distanced from their support network, experts have warned. 

Speaking on the latest FTAdviser podcast Myron Jobson, personal finance campaigner at Interactive Investor, said fraudsters were hiding their schemes among increased correspondence from legitimate organisations. 

"Unfortunately we have seen some really creative and awful scams that have come about as a result," he said.

"For example everyone knows the government has made funding available to support individuals and help them through the pandemic. 

"And guess what, scammers have jumped on that too in a bid to promote their nefarious schemes. There have been many reports of fake emails offering grants doing the rounds, which are attempts to steal personal information." 

At the beginning of November alarm bells were sounded when the number of scam warnings issued by the Financial Conduct Authority surpassed 1,000 for the current calendar year. 

The number of warnings, which are published on the regulator's website, peaked in the final week of September when the City watchdog listed 43 scams, clones and unauthorised firms in just seven days. 

Simon Harrington, senior policy adviser at Pimfa, joined Mr Jobson on the podcast and said the trade body was particularly worried about people being unable to share knowledge about potential scams as a result of pandemic restrictions. 

Mr Harrington added: "The thing that we are particularly worried about alongside the emergence of new scams is the extent to which a global pandemic and, with it the accompanying social distancing, strips away the support network of individuals. 

"People are being forcibly stripped away from their checks and balances.

"I know a lot of the time when we talk about financial services, we say well it's actually a bad thing that people can for example go down the pub and ask someone what they are doing with their pension money and decide to do exactly the same thing. 

"But in the context of people being worried about their financial future and vulnerable, they are no longer able to say 'somebody contacted me about a way out of a financially precarious situation' and for that person to turnaround and say well that's nonsense or dangerous for a number of reasons." 

In the second chapter of the podcast, hear about the latest news on the FSCS levy and what the chancellor's spending review means for the industry from senior reporters Amy Austin and Imogen Tew. 

rachel.mortimer@ft.com 

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