The Financial Conduct Authority has revealed its concerns over how the current global health emergency could lead to an increased risk of consumers falling victim to scams. Legitimate financial services firms could have a role to play in educating their customer base and the wider public in this respect.

In the main, the scams can be divided into two categories: scams that have been in existence for some time, but where the criminals use elements of the coronavirus crisis to promote their cause; and new scams that specifically relate to Covid-19.

In the former category, scams and swindles might include:

  • Preying on people’s heightened financial worries and promising they can find them a loan or other credit, and then never arranging any credit after pocketing an upfront fee
  • Using the current stock market volatility as a pretext for encouraging consumers to switch their investments, and then placing their funds in high-risk areas instead
  • Enticing people to click a link and provide their personal details to ensure they continue to receive certain benefits, for example one scam of this nature is understood to involve free school meals, while another involves fake HMRC messages and claims tax relief can be claimed

In the latter category, the current scams are said to include:

  • Seeking investment for what appear to be business initiatives related to the virus, such as the production of sanitiser, manufacture of personal protection equipment (PPE), vaccine research or new anti-viral drugs; or offering to sell these products – goods which are then never delivered
  • Claiming that they can help the consumer reclaim the costs incurred when an event, such as a holiday or wedding, was cancelled due to coronavirus
  • Telling the consumer that the health crisis requires the funds in their bank account to be moved to a ‘safe’ account
  • Criminals knocking on doors and supposedly offering to conduct shopping trips on behalf of vulnerable people; or saying they are from health organisations and can conduct tests for the virus
  • A fake Government message saying the recipient has breached the lockdown and needs to pay a fine

The FCA’s advice to consumers on this topic includes:

  • Check the Financial Services Register to ensure the firm they are dealing with is authorised
  • Check the FCA’s Warning List to ensure the firm is not listed there
  • Be wary of responding to any online or social media advertisement
  • Think carefully before making any decision concerning their finances
  • Never give out their personal details
  • Report any suspected scam to the FCA and Action Fraud

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article