The guide for firms provides information on the most common examples of fraud that PIMFA has identified in the past few years, including impersonation fraud, retail bond fraud, social media fraud and cloned websites. It also provides examples of real-life situations in which a firm or its clients were the victims of fraud, as well as advice on best practice to help prevent fraudsters from gaining access to clients.
This guide for firms is the next stage in PIMFA’s continuing work to protect consumers from online scams and fraud as part of its Financial and Mental Wellbeing campaign. A guide for consumers will follow shortly, alongside a refreshed ScamSafe microsite containing more useful information for firms and clients.
It comes as PIMFA joins with 16 other organisations championing consumers, and representing civil society and business to warn the UK risks failing in its ambition to be the safest place in the world to be online unless it uses new laws to protect people from an avalanche of online scams.
In a joint letter to the Home Secretary and Digital Secretary, 17 organisations have urged the government to include online scams in its proposed Online Safety Bill – which could be announced in next week’s Queen’s Speech – so that consumers are better protected against the devastating financial and emotional harm caused by these crimes.
The organisations that have signed the letter include Which, the Money and Mental Health Policy Institute, Carnegie UK Trust, UK Finance, the Personal Investment Management and Financial Advice Association (PIMFA), the City of London Corporation, City of London Police, The Investment Association, Association of British Insurers (ABI), MoneySavingExpert and Age UK.
Online fraud is a growing threat to consumers and advice firms alike. Last year, Action Fraud received 356,649 reported cases of fraud with £2.1bn estimated to have been lost to fraudsters.
Of the total, investment frauds that encourage consumers to buy unsuitable, or non-existent, investment products, pension liberation scams, Boiler Room scams and Ponzi or Pyramid schemes, accounted for less than 10% of all reported crimes (20,152 reports) but 25% of all financial losses at £501m.
Action Fraud figures show a dramatic increase in online fraud over the past year perpetrated by organised criminals and PIMFA is working alongside Which UK Finance, The Money and Mental Health Policy Institute and The Carnegie Trust amongst others who believe that the best way to disrupt these organised criminals and protect consumers online is through the inclusion of financial harm in the Government’s upcoming Online Safety Bill, which we expect to be included in the Queen’s Speech in May.
Giulia Lupato, Head of Regulatory Policy and Compliance at PIMFA, commented: “We know that fraud has been moving online for some time and is becoming ever more sophisticated. We also know that those carrying out these frauds are nearly always organised criminals and that they are targeting our sector in particular - often in combination with other tactics such as impersonation fraud.
“We hope the fraud prevention guide will help firms to protect themselves and their clients as much as possible from fraudsters, and we would encourage members to continue to keep us informed of any attacks they experience or hear of, so that we can continue to update the guide when necessary.
“At the same time, we continue to believe the Online Safety Bill offers one of the clearest ways to provide a legal framework that offers consumers greater protection from online fraud.
“PIMFA and our partners in this campaign continue to urge the Government to reconsider including financial harm in the Online Safety Bill. Doing so would save thousands of potential victims suffering enormous financial and mental distress, loosing lifetime savings for many, and would be one of the best possible ways to disrupt organised crime.”
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