Personal Finance

Steps you can take to help identify if you are being targeted by a financial scam

‘I am looking at three scams from readers now totalling £250,000.’

Over the shoulder view of a woman receiving an incoming suspected call from unknown caller on her smartphone and rejecting the call at home. Device screen showing warning sign as detected by the network provider.
Scammers are very well organised, but often the signs are obvious, blinded only by the dopamine rush of dopamine rush of ‘making a quick killing’. (Getty Images)

It’s back to investment scams again. I will just preface this column and all scams with this super sandwich quote from two bright young lads:

Einstein: “If you can’t explain it simply, you don’t understand it enough,” and

Warren Buffet: “Risk comes from not knowing what you are doing.”

Put those together and you wouldn’t enter an arrangement with people you didn’t know or trust.

There are two key lures used: one is the fear of losing out which the scammers know full well how to strategize.

They couple this with the dopamine rush of ‘making a quick killing’. There is no shame in being caught by these people, so don’t worry about that aspect.

They are very well organised, but often the signs are very obvious, blinded only by the aforementioned dopamine rush.

Some scammers actually convince the victim that their bank is getting in the way, and they should hide their transaction from them.

Don’t do that. I am looking at three scams from readers now totalling £250,000.

I was asked yesterday about a company called Cinpax where I was told they were regulated by the Financial Conduct Authority (FCA).

If I go to the FCA website and search for ‘Cinpax’ I will find a warning saying they aren’t authorised and may be targeting people in the UK and to avoid dealing with this firm.

In financial services, almost all financial organisations must be registered with the FCA, so if they are not registered, avoid them.

The FCA has a register of companies on its warning list.

There are 13,477 of them and the one that has executed the biggest scam above, isn’t listed there yet!

A common tactic with a scammer is to create dummy pages of the FCA website so if you Google search: ‘The company name, FCA’, up pops a page that looks like the FCA page and says they are a grand bunch of lads who are just misunderstood, when in reality, you are not looking at the FCA page.

‘Would they go to that much trouble?’ I hear you ask. Artificial intelligence could set up that page and a Google sponsored pay per click campaign in minutes.

Go to the FCA page only, and don’t click a sponsored link to get there.

Within that FCA page, search for the company. If you can’t find them, go to your independent financial adviser or accountant, bank manager or solicitor.

I know that the dopamine rush of becoming rich overnight isn’t the same as talking to one of us four ‘boring lot’, but it’s significantly less expensive.

Cinpax. Well, they really are a hoot. Blinded by the potential returns (dopamine rush), we don’t look at the detail.

A trip to their X (Twitter) account shows just three followers, of which one is a scantily clad young lady who I’m sure is just really interested in investments. Their posts are all about rockets.

Their website is a website within a website (that’s techie but it shouldn’t happen, and your data is likely going elsewhere).

On WHOIS, the data is deliberately hidden, as is the owner, their address, the registrar, technical contact and administrator.

When registering, there are issues with the terms of business (like limited liability of the company from hacking, restrictive withdrawal terms) that should stop you ‘investing’, but a short study of their complaint’s procedure is just…well, nuts.

I won’t get into them all, but these belters take the biscuit.

You must allow them 30 days to deal with a complaint and are not allowed to contact the press, or anyone else in this time or make public statements - enough time for them to run far, far away.

Violating the terms of their complaint policy, such as using a different email to submit a complaint or making public statements about the dispute, can lead to severe penalties including the termination your trading account and revocation of profits.

Stay very, very clear.

Peter McGahan
Peter McGahan.

Peter McGahan is the chief executive officer of independent financial adviser Worldwide Financial Planning, which is authorised and regulated by the Financial Conduct Authority If you have been affected by this, please call us on 028 6863 2692 and we will do what we can to assist.