Quilter is warning people to stay alert to the risk of impersonation fraud, and has published a new video on its ‘Stay Safe’ webpage to provide customers, advisers and the wider public with tips on avoiding such scams.
The FCA has issued 238 impersonation scam warnings in the first six months of the year, already seven more than were issued at the same point in 2020. More warnings have already been issued in 2021 than the entirety of 2017 and any year previously.
Impersonation scams occur when sophisticated organised criminals impersonate a reputable financial services firms to sell non-existent investment products to consumers, often through social media posts or paid-for adverts on search engines.
Action Fraud figures show that in 2020, more than GBP78 million was lost to investment scams that used an impersonation of a real financial services firm, and the City of London Police reported that GBP63 million has also been lost through social media scams in the 12 months to March 2021.
The number of warnings issued already in 2021 suggests the amount lost this year could be similar, if not more.
Quilter has also called for new legislation to protect consumers from online investment scams, and recently wrote to the Prime Minister and the Minister for Online Harms to urge the government to include scams facilitated through social media and search engines in scope of the Online Safety Bill.
The government has since confirmed that investment scams facilitated on social media will be included in the Bill, but search engine adverts will not be included.
Debbie Barton, financial crime prevention expert at Quilter, says:“Social media has revolutionised our lives and made us all more connected, particularly during the pandemic. But social media has a dark side. Like other areas of the online world, scammers know they can use social media and search engines to promote their dubious investment schemes with relative impunity.
“A big reason why so many warnings are being issued is that the FCA is becoming more proactive in adding impersonation scam attempts to the warning list, but the fact they are coming quite so thick and fast with no let-up is deeply concerning.
“With well over 200 cases added to the warning list this year, on top of over 1,500 added since 2010, the impersonation scam threat remains very real and people are at risk of losing life changing amounts.
“The government has said that scams that appear through user-generated content on social media will be included in the Online Safety Bill, but this doesn’t go far enough. Scammers will still be able to pay for adverts on social media and indeed on search engines to promote their fraudulent schemes.
“The government still has plenty of time to amend the Bill to stop this illogical situation from occurring.”