One of the unfortunate consequences of the coronavirus pandemic is a rise in scammers.
During challenging times, scammers seek to take advantage of the uncertainty to con people out of their hard-earned money.
Now, industry trade body the Association of British Insurers (ABI) is warning people to be on their guard.
The ABI warns that scammers could use the crisis to promote high-risk investment and pension products, as well as fake insurance products.
“Criminals are experts at exploiting situations for their own gain and coronavirus is a perfect opportunity for them, so people need to be on their guard. Consumer scams can leave people seriously out-of-pocket.
“If someone offers you a deal that looks too good to be true, then it probably is. If you are unsure, always check the Financial Conduct Authority’s Financial Services Register to make sure that who you are dealing with is genuine.”Mark Allen, ABI’s Manager, Fraud and Financial Crime, said:
An economic downturn, which is widely expected following the pandemic, is a ripe environment for scammers, who seek to scam personal data and monies.
Individuals and businesses are targets for these scammers, who seek to exploit our anxieties and fears.
These scams could take the form of emails, calls or texts from fraudsters who are impersonating others.
Be particularly cautious when receiving unsolicited approaches from claims management companies, insurers, pensions providers and other organisations.
Acting as these organisations is a ruse from scammers to con you into giving them your personal or financial information or your money.
There are several styles of scam of which you should be aware at this time.
Robocalls or automated texts are a favourite of scammers, as they allow criminals to contact individuals at scale.
If you’re on the receiving end of an automated call or text message, it might offer you the opportunity to recover losses suffered during the coronavirus crisis, in return for a fee.
Examples of scams offering to recover losses include the cost of a holiday or wedding, cancelled due to the crisis.
Another form of scam targets pensions and investments, claiming to guarantee you higher returns than those available from cash savings.
With interest rates slashed to near zero, to help stabilise the economy during the crisis, the return on cash savings is unattractive, and scammers exploit this fact by offering high rewards with low risks.
“Sadly, fraudsters are known to be especially opportunistic during times of economic hardship so it’s important for the public to be wary and do basic checks when taking out insurance services to help ensure they’re genuine.
“Fraudsters may also exploit the situation to make fraudulent claims and IFB investigators and intelligence analysts are actively working alongside the insurance industry and the police to identify them and protect genuine policyholders and claimants.
“If anyone has suspicions of insurance fraud, they can help our investigations by reporting their evidence to our confidential Cheatline service at www.insurancefraudbureau.org.”Stephen Dalton, Head of Intelligence and Investigations at the Insurance Fraud Bureau, said:
A fundamental concept of investing is that risks are correlated with returns; if you’re offered an above-market return on your investment, that always comes with risks.
Cold calls about your pension are also a scam. These cold calls were made illegal by the government, so any cold call about your retirement savings is a scam. Hang up the phone!
A common scam related to pension cold calls is the offer of a ‘free pension review’. Just say no.
Watch out too for phishing emails. These dodgy emails are an attempt to trick you into clicking a malicious link or opening an infected attachment.
When the scammer gains control of your device, they can access your personal and financial information.
The ABI warns about the dangers of ghost brokers. These are scammers who use the branding of legitimate firms to flog fake or invalid insurance products, including travel and business interruption insurance.
Always check that you are dealing with a genuine firm, which is authorised and regulated by the Financial Conduct Authority.
“This is a very worrying time for everyone, and the impact of the coronavirus on financial markets is adding to the stress. Difficult as it is, the most important thing is not to panic or rush into making any decisions about your pension at the moment.
“We know scammers will try to take advantage of the situation so you should be suspicious of any unexpected approach. Before you do anything, it’s worth getting independent guidance or advice.”Charlotte Jackson, head of pensions operations and consumer protection at the Money and Pensions Service, said:
One more scam to look out for is false insurance cancellation.
Scammers will call you to say your insurance policy is cancelled, offering to reinstate the cover over the phone, in return for an additional fee.
There are several rules to follow, to protect yourself from scams.
The golden rule is, if something is too good to be true, it usually is. Treat attractive offers with suspicion.
Never feel pressured to accept an offer or deal on insurance, pensions and investments. There’s no rush to make important decisions about your money.
Always carry out due diligence about the person and firm with whom you are dealing. Check the financial services register from the Financial Conduct Authority, and call them back on a number you have independently verified.
Never give personal information to a caller, including details about an insurance or pensions policy, or any other account details.
When calling an insurer or product provider, always use the contact information provided on their official paperwork. There’s a risk that, if you search for the contact details online, a fake website could lead you to a scammer.
“Fraudsters are heartless and selfish criminals, who have no qualms about using tragic events, including the COVID-19 pandemic, to make them money. Several of IFED’s past cases have involved fraudsters who exploited other human tragedies, such as the Grenfell Tower Fire and London Bridge terror attack, and the Manchester Arena Bombing.
“So it’s vital that members of the public remain vigilant, and aware that fraudsters will stop at nothing to try to steal their money.
“Insurance fraud is a serious crime and is treated as such by IFED, the insurance industry and the criminal courts. We want fraudsters, and indeed anyone thinking of making a false claim related to Covid-19, to be in no doubt: if you commit insurance fraud, we will catch you and you will be brought to justice.”Detective Chief Inspector Andy Fyfe, Head of the City of London Police’s Insurance Fraud Enforcement Department (IFED), said:
If you believe you have been a victim of a scam, report the event to Action Fraud.
Jon Doyle is Founder and Financial Planner at Juniper Wealth Management. Advising clients since 2008 he has guided clients through good time, bad times and the ugly. With a clear vision on how advice should be delivered and strong opinions on how we should be investing money in order to live the life we want to live free from money worry.