I nearly lost 25K to fraudsters
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At the beginning of the first lockdown in March 2021, the victim, who wishes to remain anonymous, was nearly scammed out of £25,000 to investment fraudsters.
The victim, a man in his 70s from Grantham, had been doing his research and was interested in purchasing fixed-term bonds that would offer a better return on investment compared to an Individual Savings Account or ISA. After inputting his details on a website, he was contacted by four companies offering to sell corporate bonds.
“I didn’t know much about corporate bonds, so I got all four companies to send me their details so I can continue doing my research and checks. I discounted one of them straight away because they weren’t covered by the Financial Services. After doing my checks, one of the companies seemed pretty good so I decided I would go with that company once I’ve done all my checks. I emailed them and asked for further details, including their address, website, email addresses, and telephone numbers” he explained.
He also asked for the financial advisor’s name, details, and qualifications. Once everything was sent over, he checked everything and even did a search for the advisor and found him on LinkedIn.
“I also asked for their terms of trade and they sent me a nine-page contract which I printed off. I got a friend who isn’t a fully qualified solicitor to take a look at it and he said it looks pretty good, so I decided to invest with them. They sent me all the bank details and I checked those out. Everything just seemed to look pretty good” he said.
After conducting further research and checks on the company, he decided to invest with them.
“I thought I’d just send £5,000 to start with so I went onto my bank to put in a transfer. They didn’t give me any warnings, which was very surprising in hindsight, and I ended up investing £25,000.”
Over the course of six weeks, the fraudster, posing as a financial advisor, had built a relationship with the victim. He kept in regular contact, even after the money was sent, making the interaction seem more legitimate.
“He kept in touch. He was very friendly, wasn’t pushy. Everything seemed very professional. He rang me once a week asking if I’m alright, if I’m happy with the investment and to give him a ring if I wanted to invest more money. I left the investment for a couple of months then rang the financial advisor who said they had more corporate bonds coming up and to contact him if I was interested.”
Another week went by and he decided to contact the financial advisor to enquire about the bonds – but there was no answer. He sent an email to the company, but this time, he’d missed a hyphen out. Half an hour later, he received a phone call from a gentleman, informing him that they had no advisor by that name and that their company had been cloned by fraudsters.
“I was gutted. I felt a total idiot. I thought I’d done everything possible with the checks I was doing. I felt I let myself down, my family down because I didn’t spot a scam where I should’ve done and that was the worst bit about it. Finding out I had been scammed put my mind into gear and I knew I had to do something, that’s why I rang the bank, Action Fraud, the Financial Services, Trading Standards then eventually, Citizens Advice.”
Thankfully he was successful in getting his money back as he was able to prove he had been diligent in making checks prior to the investment. He’d kept copies of all the emails and paperwork sent by fraudsters from the cloned company, including bank details, as well as the advisor’s photograph and profile on LinkedIn.
His bank also informed him that they could’ve helped him more by offering information on potential scams and advising him of the risks when his first payment went through. He also believes that the pandemic has provided fraudsters with the ideal opportunity because of the limited face-to-face contact and increase in online interactions.
“At the height of the pandemic, people weren’t going out and seeing others and everything was being done online so it really has given fraudsters the scope to carry out these scams. Because of my experience, I’ll never do another transaction of that sort online” he explained.
The victim offered some advice to others who are concerned they may find themselves in the same situation as him.
He said: “If you’re going to deal with a company, make sure you get their Financial Services reference number or FRN. You can input this on the Financial Services website, and it will bring up the name of the company and it will give you all the details of their switchboard, their telephone numbers and other contact details. You have to be careful with emails and phone numbers because sometimes, they’re identical apart from one digit or one character and that makes such a big difference.”
Report it
If you think you’ve been targeted by an investment fraud, please report it to the FCA Scam Smart website. If you think you’ve fallen victim to an investment fraud, report it to Action Fraud as soon as possible, either online or by calling 0300 123 2040.
I had an ISA that was maturing that had been in there for a long time. When I looked at the interest rates, they were worth next to nothing so I searched for fixed-term bonds and found a website that could help. I typed my details in and within a few hours, I was contacted by four different companies offering to sell me corporate bonds.
I didn’t know too much about corporate bonds, so I got all four companies to send me their details, checked it out and decided that this could give me a little bit more interest than I could get from an ISA. I asked them all for more details so I can continue doing my research and checks. One of the companies, I discounted immediately because it was what I call an asset-backed investment and I was looking for a company that was covered by the Financial Services.
After doing a lot of checks, one of the companies seemed pretty good. I emailed the company, asked for their full details, address, website, email addresses, telephone numbers, the advisor’s name, and qualifications. Once that was sent over, I went through it and checked everything. I even did a search for the financial advisor and found him on LinkedIn. His photo and all his qualifications were there, and it stated he was a financial advisor for the company. I asked them to send me their terms of trade and they sent me a nine-page contract which I printed off. A friend of mine, who isn’t a fully qualified solicitor, had a look at the contract as well and said, “it looks pretty good to me”, so I decided to invest with them.
I went back to the company, said I was going to invest, and they sent me all the bank details. I checked those out and everything seemed to look pretty good.
I thought I’d just send £5,000 to start with and I went onto my bank to put in a transfer. Not long after, the bank rang me to ask if it’s a new company and I explained that I’m looking to buy some corporate bonds. In hindsight, it was very surprising that they didn’t give me any warnings. When the transfer went through, everything seemed to go well from there. I ended up investing £25,000.
Everything was very professional. The financial advisor kept in touch every week for at least six weeks. He was very friendly. Wasn’t pushy. He rang me once a week after I’d sent the money to ask how I was doing. Asked me if I had any questions and telling me when my first dividend would be due. Everything just seemed so genuine. He kept in touch even when the company already had the money.
I left the investment for a couple of months and decided to ring the financial advisor again. He mentioned they have more bonds coming up and asked if I was interested and to let him know so he can send further details. Another week went by and I decided to take a look at the bonds the advisor mentioned so I rang him. There was no answer.
I rang the switchboard number and a lady answered saying “unfortunately we’re having issues with our telephones and we can’t contact your advisor”. I thought, this isn’t right. So I sent an email but this time, I’d missed a hyphen out. Soon after, I received a call from a gentleman who said I received an email from you, but we have no advisor by that name. He said we’re sorry to tell you, but we’ve just found out ourselves that our company has been cloned by fraudsters. All we can advise is for you to contact your bank and tell them you’ve been dealing with fraudsters on what we call an APB push fraud. I’ve heard of most scams, but I’ve never heard of this one.
As soon as I found out, I felt a total idiot. I knew most of the scams going around and I’ve got to be honest, I was 1000% sure that I’d never become a victim of fraud. I thought I’d done everything possible to avoid becoming a victim and that’s what hurt me more than anything, that I’d made a fool of myself. I felt like I’ve let myself down, my family down and everybody down because I didn’t spot a scam where I should’ve done and that was the worst bit about it.
Finding out that I’d been scammed put my mind into gear and I knew I had to do something, so I rang my bank, the Financial Services, Citizens Advice, Trading Standards and Action Fraud.
Fortunately I’d kept copies of all the emails and information that I had on the company, including the bank details where I transferred the money. I’d saved screenshots of the financial advisor’s profile on LinkedIn as well as the nine-page contract they sent me.
I was told it wasn’t in my bank’s policy to refund me with this APB push fraud, but after their review, they told me I wasn’t found to be negligent in the checks I’ve done so they decided to refund me the full amount. When I heard the news, I was ecstatic. I was practically on the ceiling. They also said they could’ve helped me more and could’ve prevented this in the first place if they had given me more advice when my first payment went through.
This pandemic has really given scammers the ideal opportunity because, when this happened, people couldn’t have face-to-face meetings, banks were shut, and everything was done online. Because of my experience, I don’t think I will ever do something like this online.
My advice is to make sure you do all the necessary checks beforehand and keep a record of your interactions as well. I learnt after this experience that I could’ve done a reverse-image search for the financial advisor as well to see if it really was him.
In this particular case, I’d also advice people who are dealing with companies to ask for their Financial Services reference number – or FRN – to verify their identity. You also have to be careful with phone numbers as there are times when the numbers look exactly the same to the company but only the last digit or last two digits are different. With emails as well, I’d say to make sure you check these properly. In my case, the emails were identical apart from a hyphen and that makes such a big difference.