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Scam enquiries to the City regulator up by a third

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Written by:
03/03/2022
The Financial Conduct Authority (FCA) received 16,000 enquiries about possible scams between April and September 2021, a 30% increase on the same period in 2020.

The top four scams reported were boiler rooms, cryptocurrency scams, FCA-impersonation scams and recovery rooms.

It said its cryptoasset team opened 300 cases relating to potential unregistered cryptoasset businesses, and added 172 firms to its unregistered list.

In the six month period, it also published 735 alerts about unauthorised firms or individuals, “continuing the upward trend in our last report”, it said.

Further, the regulator also stopped 32 new firms – one in four – from entering the investments market. This is up from the one in five reported in the previous year.

“In nine of these cases, we suspected phoenixing or lifeboating by advice firms” it said, adding that this number in just six months is the same as that for the whole of the previous 12-month period.

Turning to pension scams, 106 cases were opened based on information received, but this was a 34% decrease compared to the previous six-month period.

This resulted in 14 firms prevented from undertaking activities which caused consumer harm.

Sarah Pritchard, executive director of markets at the FCA, said: “Consumers need to have confidence when making investment decisions and the data we’ve published today shows how prevalent scams can be.

“Before investing, check you know who you are really dealing with, check if they are authorised by the FCA and do your research to understand the risks that might be posed. Find out how to avoid scams on the ScamSmart website and get tips on investing safely on the InvestSmart website.”

Laith Khalaf, head of investment analysis, AJ Bell, said: “Scam activity is not new, but it does appear to be increasing in scale, and embracing new forms of digital communication. Almost one in five (19%) of FCA ScamSmart users reported hearing about potential scams through social media adverts, and 4% were actually directly approached on social media. That’s not to say traditional forms of hard selling have disappeared though, with a large number of people still hearing about potential scams on the phone or through friends. The vast network of information channels now used by consumers simply amplifies the opportunity for scammers and heightens the risk of scam activity.

“Investors in today’s world do need to be watchful, and not let down their guard because they think they’re too smart to be conned. Scammers are adept at targeting consumers with appealing messages at a time when their defences might be lowered. As ever it makes sense to invest with robust, trusted businesses who are registered with the FCA, and if you are approached out of the blue with an offer that sounds too good to be true, alarm bells should be ringing.”

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