22/09/17Scams….a brief history.
As a child brought up in Londons’ East End, seeing someone sell stuff out of a briefcase wasn’t something I had to wait and see ‘Del Boy’ do! Huge brand names of perfumes on show by a smooth talking chap. For “obvious reasons” he would say with a wink, the remaining stock was wrapped in brown paper…needless to say, he sold the goods and quietly disappeared, knowing people have paid for a wrapped weighted box.
We could look at the great film ‘The Sting’ and go further back than the 1960’s I describe above, getting people to gamble on horse races that have already been run! Someone, somewhere is always looking to get rich quick and to take advantage of well rounded, trustworthy human beings.
We have seen the humble ATM (Automated Teller Machine) become a huge focus in the 80’s and 90’s, from someone tapping you on the shoulder as the cash is withdrawn, so you turn around enabling the person to access the cash hanging out of the machine. Forklift trucks smashing into a bank branch and stealing the machine in its entirety, to the 2000’s when clever fascia’s and pinhole cameras were used to read your card before its gets into the machine and to see you type in the PIN number, meanwhile, outside in a van/car is someone with a bit of kit, reproducing your magnetic card strip and having seen you enter your PIN via the camera, can go back in and withdraw the maximum permissible.
We have seen the emails/letters asking for your account and sort code so some high ranking official, in some far away country can send you money (people do, or else why do these emails still come around?)
We have also seen the rise of the ‘Long Con’ a fifties phrase, which basically takes the ‘victim’ on a long journey, convincing him to invest money and more money as elaborate brochures are sent, lunches bought, and lots of backslapping which ultimately gets that trusting person to invest. All goes well, updates are sent…… until maturity date – when nothing but silence can be heard and that victim has to tell his wife and family that he’s lost half their wealth (Someone came to see me and was delighted with what he thought he had invested in. I wasn’t as confident, took copies and sent them to the fraud department, who returned to me the correspondence they had had with the Serious Fraud Office – I was the person who had to break it to him that he had been conned and he wouldn’t see the money.
Nowadays, it’s either brutally blunt – “Hello, this is your bank, your account has been subject to an attempted fraud, but don’t worry – we stopped it. However, can we suggest you come down and withdraw your cash, take it home….we’ll sort everything out and when we’re ready and we’ll send a private courier to collect it back from you” (yes, really) to the scams we see today, where fraudsters are using HMRC logo’s or that of your bank and a letter that convinces us to divulge the information requested, or calling us and asking us to call back, but they don’t hang up, so you think you are talking to your bank, when in fact, the previous caller is still on the line (always call back on a different telephone wherever possible if you’re not sure). Not convinced with the money in our bank account, or identity theft, they’re now after your pensions…..
Pension Scams:
Once you’ve exercised your pension rights, it’s very difficult for a scammer to get hold of it, so the target ‘tends’ to be the 35-55 age group – mortgages, kids, cars all the things that eat into our hard earned salary makes us long for the days when we can access our pensions….and so a chance to get hold of all your pension (bar a large percentage in commissions) seems to good an opportunity to miss..doesn’t it? Many people of all ages have followed this route..answered a call that seemed to lead to the utopia of unwrapping all of their pension plans into cash….only to find it arrived with said chunk of commission missing and a letter from HMRC asking for 55% tax charge for an unauthorised payment.
Or worse still, the promise of double digit returns by investing in offshore wind farms, property development in far away places and fed up with the low returns you are getting, you sign it over..only to find it’s disappeared into someone elses’ pocket, with little chance of getting it back.
A pension is designed to be available for you at 55 years of age – minimum, unless you are in a recognised profession where retirement is earlier – professional sportsman, Police, fire service, army etc – anything offering you access earlier should be checked over by an Independent Financial Adviser first, who will tell you in a heartbeat whether it’s right or not.
“9% guaranteed for 3 years….”
A penny for everyone who has emailed me over the years if they should invest – property, car parking spaces, storage box..etc….Not so much a scam, but shall we say misleading? Often these companies use a solicitor for the transactions, and they will use something like “Regulated company for transactions” and display an authorised logo. The thing is, the logo relates to the solicitor or money handling company and not necessarily the company offering the investment. So check to see if the company offering the investment is regulated and authorised by the Financial Conduct Authority if they are, then you have some protection. You can check this on the financial services register at https://register.fca.org.uk/ or give them a call on 0800 111 6768.
My question is always ‘what happens in year 4?’ If it’s a property, where is it? We have recently seen in the news a property bought at auction was subject to a demolition order. So if you are investing for 9% for 3 years…is the property viable? Is it potentially in an area where no one wants to buy/rent, or the area itself has a local ‘blight’ issue..all of these issues can cause your asset to stagnate or even reduce in value and make it very difficult to realise your cash, which you may well need, because after all you can’t break a brick off of the building and exchange it at a supermarket for your weeks’ shopping. If it’s a storage box or car park space, does someone have to hire/park your particular unit/space, or is the profit from owners spread around? Don’t get me wrong, property is great for an investment and there is nothing wrong with being speculative with things like storage and car park spaces, so long as the investor knows exactly what they are getting into and unfortunately, the companies that offer these investments, rarely give information up front.
So as with everything where we’re not too sure, take the tailor’s advice : measure twice; cut once. Do the research and by that I mean reach out to an Independent Financial Adviser and ask their opinion; at least you’ll be able to go into something eyes wide open with no surprises. I certainly would offer my guidance free of charge and be delighted to assist.
Victor
