The Financial Conduct Authority’s Consumer Contact Centre is being bombarded by people concerned about scams and potential financial stings, with over a third (36%) of enquiries to the helpline from people checking on the status of firms to see if they are regulated by the FCA.
The centre is the main point of contact for financial services consumers and, although the number of calls has fallen 10% on the previous year, it still handled nearly 107,000 calls to the year ending November 30, 2016 – equivalent of over 293 calls every day.
While FCA registration enquiries topped the chart, a further 15% of calls related to how people were treated by firms in areas such as claims handling and arrears or repossession queries; and 13% were reports or enquiries about potential or actual scams.
The regulator also revealed the most common stings, with advance fee fraud leading the pack, with a 42% increase in contact centre calls.
In a case study, the FCA told how one woman contacted the call centre after being offered a £1,000 loan, to check if the firm that made the offer was genuine. “The firm had called her after she applied for a loan of £1,000 online,” the FCA said. “She had already given them her bank details, but they then asked her to pay an upfront fee, equal to the first month’s payment, or to provide a guarantor.
“A regulated firm of the same name was listed in the Financial Services Register. We gave her this firm’s details from the register and suggested she contact them to see if they had a record of her.
“She called us back a few days later to let us know that it wasn’t the regulated firm who had contacted her.
“While we were speaking with her, the fraudster called her back and she told them that she had reported them to the FCA. The scammer told her she was blacklisted from applying for loans.”
The regulator then advised the woman to speak to her bank and Action Fraud, before adding a warning on its website making others aware of the cloned firm.
Boiler room scams, where fraudsters cold-call investors offering them what later turn out to be worthless, overpriced or non-existent shares, were the second most common accounting for 28% of the total.
“While they promise high returns, those who invest usually end up losing their money” said the FCA. “The fraudsters use high-pressure sales tactics and often target older consumers.”
A third fraud which has seen a rise of a third year-on-year is the “FCA scam”, where people and firms are contacted through email, letters or by phone, by fraudsters trying to extract money or personal details by the caller claiming to be from the regulator.
City watchdog admits to highly embarrassing leaks
Red faces at ICO as it fesses up to 14 data breaches
Big issues to tackle in 2017: red alert on legislation
FCA examines insurance industry’s use of big data
Insurers off the hook as FCA rules out big data probe