I last wrote about scams 6 years ago, and in that time the size, speed and sophistication in which scams have evolved has been prolific.
It’s no longer the usual telephone or email scams, instead they are entrenched into every sphere of our lives. Historically, it was the elderly and vulnerable who needed to tread most carefully, but what we are seeing now goes far beyond that.
Nowadays, the younger generations need to be cautious too.
“Over half of those who have acted on social media financial advice have lost money” ~ TSB Bank
A recent study of 2,000 people by TSB revealed some startling facts about the rise of financial advice on social media:
- Nine in ten have seen an investment ‘opportunity’ on social media
- 49% of 16 – 24-year-olds, and 37% of 25 – 34-year-olds, felt compelled to take out a product, or invest after seeing wealth content on social media
- 55% of those who acted on financial advice seen on social media subsequently lost money[1]
And no, this doesn’t mean that all financial advice posts that you see on social media are going to be scams, however there are some obvious red flags to be aware of, including:
- Promises to achieve high returns, making you “rich without risk”
- Guarantees that you can avoid tax by investing in said product
- Limited offers, creating a sense of urgency
So, what can you do to protect yourself?
1. Always know the source – if you see an advert offering financial advice on social media, or anywhere else for that matter, then do some digging on who that company is. If they are not on the FCA register, then you should not be engaging with any “advice” that they put out, as they are not a regulated firm and you will be at a much greater risk. (Note: even if they are on the FCA register, this does not eliminate all risk)
2. Do your due diligence – even two weeks ago, I received an email from a law firm that I had never worked with or heard of, but the email was so sophisticated that it was able to create an email chain below it that looked like they had been in communication with my colleagues and needed an invoice paying. I hadn’t seen anything quite like it – however the email address was unusual, and just with a quick Google search I saw a press release that the firm had issued making people aware that this was not them. Citizens Advice have a great tool that might help you with your initial investigations: Check if something might be a scam
3. Learn more about scams – don’t wait until it could become too late. Take a look at the Take Five To Stop Fraud website to find out more on the common signs of scams, and what you can do to protect yourself.
4. We are here to help – you may have seen something yourself that you’re not sure on, or perhaps your children are coming across more and more scams online. You can always give us a call if you are concerned.
Similarly, if you have children or family members who would like some financial advice, or they want to learn about how to save and invest, then we are always happy to speak with them. We encourage family members to come along to annual reviews with your adviser, where appropriate.
[1] Over half of those who have acted on social media financial advice have lost money | TSB Bank
