The sheer scale of the financial scams and cons facing the UK came home to me this week with the publication of the FCA’s latest report on the many suspect financial promotions it had tackled over the past year.
In 2021 the FCA intervened in less than 600 cases to force the amendment or halting of financial promotions - last year it was almost 20,000 cases, a torrent of trashy financial promotions designed to rip people off.
Over the last year the regulator also halted, removed or suspended more than 1,600 websites - about 4 a day.
At the same time, the FCA also cancelled the authorisation of 1,500 firms, three time the number of 2021.
Every day the FCA publishes a list of firms where it has intervened. Yesterday alone, a quiet day, it published four warnings about unauthorised firms and two updates on existing firms it had already cited.
All this points to a growing mountain of criminal or near-criminal activity targeting UK consumers.
Each week there are dozens of warnings about unauthorised firms from the FCA.
This flood of potential scams and suspect firms provides a huge workload for the FCA and if there is one positive sign it is that the regulator is taking it very seriously, as it needs to.
Its data monitoring and data collection is providing greater ammunition to intervene but it’s worth remembering that many of the suspect firms are overseas and many are unauthorised. Tackling them is not easy.
For Financial Planners all this means that it is only a matter of 'when', not 'if', their clients will be targeted by scammers and crooked financial promotions. There is now a whole industry of corrupt and criminal organisations around the world targeting UK investors and the better off around the clock.
Financial Planners can be a great ally here in helping the FCA by alerting the organisation to suspect promotions and also educating their clients on how to avoid being scammed or victim to criminal activity. Anti-scam education is nowhere near good enough.
Action is being taken, however. This week HMRC brought down a major phishing gang based in Romania in a joint operation with Romanian police and we need to see many more joint efforts like this.
The fact is that each scam does more to deter people from taking regulated financial advice than just about anything else. With the fear of being ripped off high in people’s thoughts, the tendency to avoid doing anything at all and not trusting anyone is apparent. Fear is the enemy here.
Much more needs to be done to tackle the scammers who are destroying the good name of financial services and heartlessly and remorselessly cheating people out of their life savings.
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Kevin O’Donnell is editor of Financial Planning Today and a journalist with 40 years of experience. This topical comment on the Financial Planning news appears most weeks, usually on Fridays but occasionally other days. Email: This email address is being protected from spambots. You need JavaScript enabled to view it. Follow @FPT_Kevin
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