Pity the poor Independent Financial Adviser (IFA).
Its tough enough being entrusted with looking after people’s financial futures and dreams in an ever-changing world. This expert advice always comes with the health warning – “investments can go down, as well as up”.
That was, and still is, a primary concern for individuals seeking financial advice.
Now there is another pressing issue; the worry, that even with all this advice and with a variety of investments in place – ISA’s, pensions, stock and shares, and even property – how do you prevent being scammed and losing all that hard-earned cash in one go?
It’s not actually the responsibility of the IFA, who is always ready to help, advise and warn ‘caution’ – but who does the individual turn to when he or she feels they are under cyber-attack?
The current headlines concerning telecoms company TalkTalk being hacked – and the later revelations that a 15-year-old boy from Northern Ireland has been arrested and bailed – affecting the personal details of around four million customers demonstrates how vulnerable our financial wellbeing can be.
Every day, the media highlights yet another scam, whether it’s conning people out of their pension pot, money in their bank account and even money that solicitors have been given to complete a property purchase.
TalkTalk customers have been bombarded with emails and phone-calls, with fraudsters, pretending to be from the company, attempting to obtain even more personal information re bank accounts and passwords.
It’s easy to say: “be very careful and don’t give any confidential information out” – but the fraudsters are extremely cunning. To quote James Coney in the Daily Mail: “Today, personal data is everything. Modern-day bank robbers don’t wield a sawn-off shotgun – they have a computer.”
Many of the older generation don’t even use a computer; as for being computer literate, they see that as being the preserve of the young.
Mr. Coney goes on: “They (the fraudsters) mine the internet for titbits about you and I, and can use sophisticated computer algorithms until they’ve got enough of our personal data to pull off a convincing scam.”
The most worrying aspect of the latest TalkTalk hacking, apart from the age of the hacker, is this is the third cyber-attack on this telecoms company in the space of eight months. Data of broadband and mobile customers was stolen in February and August.
When it was forced to close down its website after this latest attack, it warned that the details which may have been stolen included dates of birth, banking sort codes and account numbers.
A recent study by the Financial Ombudsman Service (FOS) found that in nearly two thirds of cases of “vishing” fraud, banks were not responsible for victims’ losses. The study examined 200 cases in which account holders lost up to £100,000 each.
“Vishing” – or voice phishing – is when the fraudsters call up, posing as police or the victim’s bank. In 2014, these scams cost customers around £24m, according to Financial Fraud Action. The fraudster attempts to get the customers to move money from their account.
That sounds too simple. So they either tell the customer to phone their bank to check or ask them to ring the number that is on the back of their bank card.
The fraudster just stays of the line when the phone is put down so the customer thinks they are now talking to their bank when they pick up and dial – or they use sophisticated equipment and divert the call when it’s made to the number on the back of the card.
It only has to happen once for a lot of financial damage to be done. The general lament for those who have been “scammed” is they can’t believe how stupid they have been. The effects can be devastating.
The FOS revealed that 80% of customers “conned’ out of their cash this way were over the age of 55. The real tragedy of “vishing” is that many individuals are left without compensation having been “conned” into giving their own money away.
The millions of pounds lost and the millions of customers affected in some way does not convey the real story and impact.
This can be demonstrated by the experience of TalkTalk customers Robert and Susan Turner. For most of this year, the Turners’ phone would start ringing every evening at 25-minute intervals, and keep ringing.
The calls, claiming to be from TalkTalk, would tell the Turners there was a problem with their broadband, or ask them to sign up for a new contract, or try and sell them some other product.
The Turners were not fooled for a second. But the calls continued, even though they changed their number and signed up to call-barring services. Nothing worked. The Turners left TalkTalk in May and the calls stopped. Recently they have started again.
The Turners have lost no money, but the disruption to their lives has been immense. “Don’t answer the phone,” I can hear, but Susan’s elderly father relies on calling her in the evening.
The scale of the problem can be judged by the fact that the Office of National Statistics (ONS) reported that 5.1 million incidents of fraud were reported over the past 12 months – it is believed that millions of other cases go unreported.
It’s a problem that is going to get worse before it gets better – if it ever does. This technological age has created many wonders – and, perhaps, just as many nightmares.
For a free, no obligation initial chat about your individual finances, call us on 0800 0112825, e-mail info@wwfp.net or take a look at our website www.wwfp.net.
The value of shares and investments can go down as well as up. Your home may be repossessed if you do not keep up repayments on your mortgage.
Worldwide Financial Planning Ltd who are authorised and regulated by the Financial Conduct Authority. 'The FCA does not regulate Credit Cards, Will Writing and some forms of mortgage and Inheritance Tax Planning.'
Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.
All information is based on our understanding of current tax practices, which are subject to change.
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