Turning detective – the power of research and due diligence

New research from the Financial Conduct Authority (FCA) has revealed that the UK may be a nation of hidden sleuths. The latest findings are that 25% of investors who avoided a scam have emulated the great Sherlock Holmes and ‘turned detective’ – using research and the old-fashioned power of gut instinct to identify potential scams.

The data published by the FCA reveals that £2m was saved in 2022 by investors who spotted the tell-tale signs of a scam and reported it, with mistakes in material (34%) and requests for personal details (34%) being the most common indicators. This is promising – especially given that calls to the watchdog have almost tripled over the past five years as scammers become increasingly sophisticated and employ novel tactics.

Sites increasingly filter out fake profiles or provide added layers of security for the consumer as certain scams become more well-known, but fraud is a hydra – as soon as one head is cut off and a scam identified, two more appear in its stead. Luckily, there are some key ways to avoid falling for scams, and the FCA research is a helpful reminder of the power of due diligence.

Especially when facing ‘authorised fraud’ – where scammers pose as authority figures – it’s essential to do proper research and conduct due diligence into where it is you are sending the money. Remember, it’s your money and your time. Remain wary of online parties who seek to create a false sense of urgency or rush you. A limited-time offer or high-pressure scenario – perhaps with suspiciously high rates of return or unbelievable guarantees – are often clear indications of fraud.

As a general rule, don’t take anything at face value. It’s important to examine any communications you receive closely, especially if they come out of the blue. For instance, unexpected country codes on website URLs and checking any associated social media accounts may provide a clue that not all is as it seems.

Mehmet Goksen, Head of Corporate Development and Compliance at Conflict International, added that: “Year-on-year, scams are becoming more difficult to spot as fraudsters learn from individual’s online behaviour. While they can be very difficult to identify, the best advice we have in our arsenal is to never take anything at face value, especially where sending large sums of money is concerned. Check and check again that the website or individual is who they say they are and verify offline, via a phone call or face to face, before making any commitment.”

Unfortunately, scams are often sophisticated, and thousands fall foul every year. If you do find yourself victim to fraudsters, it can also help to spread the word by warning relatives and friends or posting on social media of the scam at hand. Please do get in touch with us at [email protected] for a no obligation chat if you need help after being defrauded.


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