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FCA Warning on Avoiding Coronavirus Scams

It is an unfortunate consequence of a situation like the coronavirus outbreak that some individuals will take advantage and exploit the resultant confusion and uncertainty for their own gain.

The FCA has now published a warning on avoiding coronavirus scams. Major events, such as the one we are experiencing, often lead to a rise in fraudulent activity, the regulator warns.

Firms should warn their customers to be vigilant for scams that may emerge over the coming months – as well as being on guard themselves. Sadly, scammers are often opportunistic and the coronavirus crisis provides them with an opportunity to try and extract personal details or money from victims who may be too scared and distracted by other things to realise that they are being scammed. Consumers will understandably be looking for help and reassurance at this time and may be more likely to accept any communications they receive at face value, where under normal circumstances they would be more suspicious.

Scammers also tend to target those who are vulnerable, who may be even more susceptible at this time.

The FCA has listed certain tactics to look out for:

  • ‘Good cause’ scams. These will typically involve scammers asking for investment in order to manufacture personal protection equipment (PPE), sanitiser or drugs to help treat coronavirus.
  • Exploitation of short-term financial concerns. Scammers will ask for an upfront fee when individuals apply for a loan that they will not receive.
  • Exploitation of the uncertainty around stock markets. Scammers may advise individuals to invest or transfer existing investments into non-standard investments.
  • Clone firms. Remember that firms must be authorised by the FCA to sell, promote, or advise on the sale of insurance products. Some scammers will claim to represent authorised firms to appear genuine. Individuals should be particularly aware of life insurance firms that may be cloned.
  • Scammers contacting individuals claiming to be from Claims Management Companies (CMC), insurance companies or credit card providers. They may claim they can help recuperate losses by submitting a claim, for the cost of a cancelled holiday or wedding due to coronavirus. They are likely to ask for money or bank details.
  • Cold calls, emails, texts or WhatsApp messages stating that the individual’s bank is in trouble due to coronavirus. These will push for money to be transferred to a new bank with alternative banking details.

What steps can firms and customers take to protect themselves?

The FCA gives the following guidance:

  • Use the Financial Services Register and Warning List to check who you are dealing with
  • Reject any offers that come out of the blue
  • Be wary of adverts you see on social media and any paid for/sponsored adverts online
  • Never open or click on links in any emails from senders you don’t know
  • Don’t be pressured or rushed into making decisions
  • If a firm calls unexpectedly, use the contact details on the Register to check that you’re dealing with the genuine firm
  • Don’t give out personal details (bank details, address, existing insurance/pensions/investment details)

We recently published some tips on basic online safety – now might be a good time for a refresher:  https://insight.rwabusiness.com/blog/posts/2020/february/basic-online-safety/

About the author

Lisa Powell

Lisa joined RWA in 2014 as an e-Learning Assistant, designing training material for the Aviva Development Zone learning platform.

Her role as Professional Standards Manager involves the creation and review of e-learning content as well as providing proofreading, copywriting and standards support across the business.