The City regulator has launched its latest ScamScart campaign to raise awareness of sophisticated investment scams, after finding consumers were conned out of over £25m between 1 January 2021 and 31 March this year.
The Financial Conduct Authority (FCA) has found a rise in screen-sharing scams whereby a consumer downloads software to share their computer screen with who they think is for a legitimate investment firm or adviser, but is actually a scammer who uses it to access the victim’s banking details. The number of these cases rose by 86 per cent in one year to reach 2,014 and over £25m in losses.
The regulator’s research showed that before making an investment, over half (51 per cent) of investors would check the FCA’s warning list, a list of firms that are not authorised or registered by the watchdog and are known to be running scams.
However, 47 per cent would not see a request to use software or an app to access their device as a red flag.
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88 per cent of consumers said they would check if their investments were offered or sold by FCA firms, but 10 per cent of these would still trust their gut instinct with an investment opportunity from someone they didn’t know without making proper checks, like ensuring the firm or the financial promotion is properly authorised.
The FCA has launched its ScamScart campaign to raise awareness of scams, call on investors to be aware of them and check the advice on its Scamsmart website, including its warning list before making any investment decisions to help identify any firms that are actively running scams, or to find out where more research is needed.
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“Investment scams can happen over many months, but sharing your screen without making the proper checks can change everything in an instant,” said Mark Steward, executive director of enforcement and market oversight of the FCA.
“Once scammers gain to your screen, they have complete control. That means access to your sensitive banking and investment information, the freedom to browse at their leisure, and the ability to take whatever details they want.
“It can affect any investor, no matter how experienced. It’s incredibly difficult to get money back once lost in this way, but there are ways to protect yourself: don’t share your screen with anyone, as legitimate firms will not ask you to do this and check out our Scamsmart website for advice on how to avoid being scammed.”
Even though older consumers said they needed more help with technology, a quarter (26 per cent) of those aged 18 to 34 would agree to screensharing their online banking or investment portal with someone they had not met.
The FCA found out what may convince investors to make swift decisions.
Nearly a quarter (23 per cent) said they would be encouraged by the person they were speaking to appeared knowledgeable about investing, 17 per cent said the possibility of securing better returns than elsewhere, and 14 per cent would be encouraged if that person appeared to be successful.