Financial scams are nothing new, but over the past few years they have become more sophisticated, with even experienced and savvy investors becoming victims.
New research though has shown that it is high earning professionals who are increasingly falling for scams, endangering their savings, investments and pensions.
The figures, compiled by Regus, a firm specialising in financial mis-selling claims, show the professions of over 100,000 victims of financial scams and reveals some surprises:
- Banking, 36%
- Manager / Director / Consultant, 20%
- Dentist, 10%
- Entrepreneur, 6%
- Lawyer, 5%
- Doctor, 5%
- Sports, 4%
It is initially surprising that these professions have been targeted by scammers. But experts believe financial fraudsters will target those people with the highest disposable income and who are therefore more likely to have larger pensions and investments.
It is also likely that many people working in these professions will have been members of Final Salary or Defined Benefit pensions, which are becoming a favorite target of scammers and fraudsters.
Types of financial scams
Financial scams can take many forms but the most common include:
- Inducing you to opt out of a Final Salary or Defined Benefit pension, only to invest in riskier assets, which are supposed to give you a better pension in retirement
- Overseas land or property, often in the form of holiday accommodation
- Other forms of unregulated investments
- Ponzi schemes, where the illusion of high returns are created by using the money of other investors
- Complex schemes to allow you access to your pension before the age of 55, which ultimately fall foul of HMRC rules
How to spot a financial scam?
There are six easy ways to spot, and avoid, a financial scam:
- If it sounds too good to be true it probably is; very simply, walk away
- If you are initially approach by a text message; never reply to an unsolicited text
- You receive a cold call; politely end the call and asked to be removed from their database
- Unregulated advisers; always check that an adviser is regulated by the Financial Conduct Authority, if they’re not, walk away
- Avoid pension liberators; you can’t legally get access to your pension before the age of 55, despite the claims you will hear to the contrary. Try it and you could be left paying a large tax bill
- Unregulated investments; these are risky and you should be extremely cautious, if you do want to consider this type of investing only buy from a regulated adviser
For more information on how to spot a financial scam click here.
We’d want to hear from you
If you have been victim of a financial scam we’d like to hear from you.
Call us today on 0115 933 8433 and ask for Phillip Bray, alternatively email info@investmentsense.co.uk
