Scammers are becoming more sophisticated…please be alert

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Scams can come in many forms, but all are designed to get hold of your hard earned money. They can do this by getting you to reveal your personal details, stealing your information, or even convincing you to willingly hand over the cash.

Knowing how to recognise a scam can be extremely difficult. Chances are, you’ve come across the most common type of scams – the spam emails, often from other countries, or attempting seemingly to be from HMRC or your bank. However, while email scams can be easier to spot and avoid, others are much more sophisticated. The following situation happened to a long standing client of ours recently. Thankfully our client made contact with us to look in to further and we were able to prevent him from making a potentially very costly mistake.

Our client had been looking for a better interest rate for his Cash ISA than his current provider was paying. He carried out a search on the web and found what he thought was a much better return from a very well-known investment provider. He felt reassured it was a highly reputable firm as they were so well known and so he made an enquiry. The person on the end of the line was very helpful and discussed how five products were available paying different interest rates, all higher than he was currently receiving. This ranged from a 1 year fixed rate of 1.75% through to a five year fixed rate of 3.5%

To provide further reassurance he was then sent an email along with a 20-page prospectus complete with the well-known company branding. At this point the client was mentally committed to transferring his £80,000 Cash ISA.

However, as he had a good relationship with his Armstrong Watson Financial Planning Consultant before he acted he wanted to double check the interest rate was correct. Our adviser commented that the interest rate looked quite high, taking in to account that deposit rates are at historically low levels due to the Covid crisis, and wanted to look at the email and brochure in more detail. He advised him to put his plans to transfer on hold while he looked in to it for him.

Upon further investigation, immediate alarm bells started to ring as some of the words in the email from the company didn’t look quite right. The prospectus, however, was incredibly convincing. Due our advisers suspicions he made contact with the well-known company who confirmed the prospectus had not been issued by them. They confirmed this was indeed a scam as they didn’t have any products of this nature. The company also then acted and the matter was immediately then passed on to their fraud department.

Scammers are becoming more sophisticated. In this case, whilst the returns offered didn’t look quite right, they were not promising ridiculously high returns. They offered a rate of interest that looked attractive enough without raising suspicion initially from the client. They then produced a detailed prospectus brochure that looked very convincing and also had people on the end of a phone who also sounded knowledgeable.

In this instance what saved the client from this scam was having an active relationship with a trusted, regulated adviser. This meant he felt it best to get another opinion first before making a decision. The experience of the adviser meant he could see through what was a very convincing scam to the public, and saved the client from parting with his £80,000 and all the stresses, strains and angst that would have gone with having acted and transferring the monies over. Having the support of a “Trusted Adviser” you can reply upon is more important than ever.

At Armstrong Watson our quest is to help our clients achieve prosperity, a secure future and peace of mind. Our Financial Planning Consultants work with our clients to provide them with support, guidance and advice to help support them throughout their financial planning journeys. Visit www.armstrongwatson.co.uk for more information about our Financial Planning and Wealth Management service.