Consumers need skill to guard themselves against scams

From Simon Burgess

It is becoming increasingly important to raise the bar of financial literacy and acumen, not only to help British consumers make the best of the financial markets but also to prevent them falling foul of the worst of them.

Financial scams are nothing new but the internet now allows con artists to cast their nets further without any extra effort. In many cases the scams are not sophisticated and the fraudsters rely on the grapeshot technique, hoping that if they send out lots of requests enough will come back to make it worth their while. Given that sending emails is free, these fraudsters only need a small hit rate to be profitable.

One customer recently contacted us asking for verification of an email they had received that claimed to be from us. It was selling protection products. The email was bogus and the matter is now with the authorities.

In this instance the consumer did the right thing but how many are falling for such tricks, whether it be to send personal details or in this case buy products that will never materialise?

It seems unlikely that anyone would fall for these scams given that emails often come with addresses outside the UK and use language that would never be seen on a communication from a financial institution, but every day hundreds do.

The faster we can improve financial literacy and the more people we can include in the financial markets, the sooner consumers will be able to dismiss these scams themselves.

In the meantime, the message to clients must be that if in doubt about a communication they receive, they should speak to the organisation it is supposedly from or a consumer watchdog such as Which?.

Simon Burgess
Managing director
By email