The Financial Conduct Authority (FCA) received nearly 5,000 reports of fake FCA scammers in the first six months of this year.
According to the regulator, out of the 5,000 reports, 480 people fell victim to these scams and sent money over. Almost two-thirds of reports came from those aged 56 and above.
Meanwhile, a ‘double dip’ trend is also emerging, where previous scam victims are contacted again and told they can recover lost money but end up losing more.
Scam methods include fake claims that the FCA has recovered money from a cryptocurrency wallet or offers to help loan scam victims reclaim funds in exchange for further payments. Other messaging claims that a County Court Judgement has been issued, instructing victims to pay the FCA.
Another tactic, called “pig butchering,” involves criminals building personal or romantic relationships before persuading people to invest in fake schemes. Victims are sometimes contacted again by scammers posing as the FCA offering to recover the money for a fee.
FCA joint executive director of enforcement and market oversight Steve Smart says: “Fraudsters are ruthless. They attempt to steal money from innocent victims by impersonating the FCA. We will never ask you to transfer money to us or for sensitive banking information such as account PINs and passwords. If in doubt, always check.”
AJ Bells recommends five ways to avoid fake FCA scammers, including being suspicious of unsolicited calls, texts, emails or unregulated offers on social media, never sending cash or sharing sensitive banking information, checking that any contact from the FCA is genuine, reporting your scam concerns and staying alert to other impersonation scams.
AJ Bell senior pensions and savings expert Charlene Young says: “This new warning from the FCA makes for grim reading, as financial scammers are now impersonating the regulator itself. The figures represent the total number of reports to the FCA where people realise they’ve been targeted and are willing to make a report. However, the true volume of victims and attempts will likely be much higher.
“Depressingly, the most vulnerable people continue to be those who are most actively targeted. We saw financial vulnerability particularly exposed by fraudsters during the worst of the Covid pandemic, and the cost-of-living crisis that followed it.
“Impersonation schemes are particularly attractive to these bad actors. One common technique involves a call out of the blue, with fraudsters claiming to be from the FCA and having recovered funds from cryptocurrency wallets opened in the target’s name without their knowledge. With the promise of a windfall, the scammers will then try to persuade people to hand over sensitive bank information including account access and PIN details.”
Young added: “These schemes can also get fraudsters a second bite of the scam cherry. The FCA has singled out a practice it calls ‘pig butchering’, where victims are targeted using a romantic or other connection which lays the groundwork for a long-term investment scam to ‘fatten them up’. After money has been handed over, fraudsters then move on to impersonating the FCA and offer to help their victim recover what they’ve already lost.
“While people of all ages can fall victim to scammers, those who are able to access their retirement pot – potentially the biggest asset they own – will inevitably be a prime target. In fact, almost two thirds of the reports made to the FCA in the update came from over 55s.
“The best way to avoid becoming a scam victim is to know the tricks they use and not hand over your money in the first place. We’ve listed five things people can do to protect themselves from these scams.”