Providers ‘critical’ to financial planners spotting scam warning signs

Providers ‘critical’ to financial planners spotting scam warning signs

Financial services providers are “critical” to ensuring financial planners and their clients are aware of the warning signs of a scam, according to Louise Cockburn, Quilter’s information security manager.

Recent data from the Office for National Statistics found a 25 per cent rise in fraud levels since before the pandemic.

There were around 4.5mn scam and fraud-related offences in the year to March 2022.

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With the cost-of-living crisis taking a firmer hold in recent months since this data was gathered, experts reckon it’s likely these numbers have risen further as new targeted scams appear.

“Attackers often exploit ‘hope’ tactics - particularly in times of heightened emotions such as now - by creating scams which feature fake investment opportunities or other deals, which turn out to be ploys to obtain personal details or gain access to personal accounts,” said Cockburn.

“Anyone can fall victim to such attacks, so it is critical that financial services firms support financial planners and clients alike to ensure they are aware of the warning signs.”

Younger clients are more likely to fall victim to scams, despite being more digitally literate.

Under 34s are twice as likely to be scammed as those over the age of 35, according to research by online bank Marcus by Goldman Sachs.

While clients of financial planners tend to be older, the risk is still one providers are seeking to address.

Cambridge Building Society set up a specialised department of what it terms ‘financial crime experts’ who help the building society identify and protect the organisation, as well as its customers, against financial crime.

St James’s Place has also incorporated awareness around fraud and scams into its training for its partnership programme, while Quilter provides ‘stay safe online’ advice which includes a list of the the group’s company websites and official email addresses so financial planners and clients can cross-check them.

“While people of all ages can fall victim to scammers, those who are able to access their retirement pot – potentially the biggest asset they own – will inevitably be a prime target,” said AJ Bell’s retirement policy head, Tom Selby.

“Huge efforts continue to be made to protect people from thieves, but ultimately the surest way to avoid becoming a scam victim is to know the tricks they use and not hand over your money in the first place.

“Scammers often use sophisticated techniques to swindle people out of their savings, with cryptocurrency ‘investments’ offering huge potential returns increasingly used to tempt people to part with their cash. These investments often end up being a Ponzi Scheme, or entirely fictitious, with those who hand over their money risking losing everything.”

Financial Crime Manager at The Cambridge, Martin Croucher, said being aware and keeping vigilant “is half the battle” in safeguarding members and employees against potential fraud.

This summer, The Cambridge partnered with Cambridgeshire and Peterborough Against Scams Partnership (CAPASP) to work with them and provide access to a range of educational material across a broad spectrum of possible activities that could potentially affect its members and the general public.