FCA's Smart Scam Investor; what every FS marketer should know

The Financial Conduct Authority (FCA) has published on its website a list of the tell-tale signs that scammers use when tricking consumers into investing in fraudulent investment opportunities, especially via cold calls.

Over the last few years, PPI mis-selling claims has been the thorn in the side of the financial services and telemarketing sectors but looking to the future the changes to pension pots will mean large quantities of cash will be readily available for those able to access their pension funds and scammers will seek to exploit this fact, possibly using scam investments.

The FCA has compiled a Warning List which list firms that the FCA knows to be running scams or that are operating without authorisation. The list also gives consumers a chance to enter in what investment type they are looking invest in and where they heard about the opportunity for example, you could enter ‘selling shares I own’ and heard about it via ‘text message’ to which the FCA guidance explains that if you’ve received an unexpected text message about an investment product it is very risky to proceed and there is a high likelihood it will be a scam. Businesses can also check to see whether their brand is being used for nefarious purposes and register illegal clone companies with the FCA.

The FCA tells the story of Clive Osborne, a 65 year old retired teacher, who was nearly caught out a scam cold caller who offered to pay a lucrative price for shares in a company that Clive had power of attorney over. In the end Clive figured the scammers out and avoided losing out. However, the case demonstrates that with a professional website and the veneer of legitimacy how easily consumers can be caught out by scammers. As mentioned earlier the changes to pensions will mean extra care will have to be taken to watch out for vulnerable consumers who may be targeted with fraudulent investment products.

This is an essential tool for the financial services sector to help build trust with consumers as it empowers consumers. Rogue companies and scammers are breaking the law and causing reputational damage for financial services brands and for the telemarketing industry. The FCA’s tool will help combat the problem.

Engendering consumer trust is fundamental to one-to-one marketing. Efforts that aim to win over consumer trust and avoid practices that cause reputational damage such as Scam Smart Investor are vital to the healthy functioning of the modern data driven economy.

Of course, this is the main aim behind the DMA Code, putting the consumer at the heart of your business and principal to this is consumer trust. The DMA supports the FCA initiative as it promotes these principles.

Link to Smart Scam Investor: http://scamsmart.fca.org.uk/page/be-a-scamsmart-investor