Financially squeezed consumers could turn to high-risk products, FCA warns
People could be tempted by high-risk, unregulated products and services or could become a target for scammers, the FCA said.
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Your support makes all the difference.People could be tempted by high-risk financial products or become targets for scammers as they are squeezed by rising living costs, the City regulator has warned.
The Financial Conduct Authority (FCA) said it intervened to amend or withdraw 4,151 financial promotions between July and September, the highest total since it started publishing the data.
Retail lending, investments and banking were the sectors with the highest rate of adverts being amended or withdrawn, amounting to 95% of the FCA’s interventions with authorised firms.
The FCA highlighted that it had seen several cases involving unauthorised firms and individuals seeking to take advantage of the rising cost of living.
During the period, the FCA issued 303 warnings about unauthorised firms and individuals, with more than 20% being about clone scams.
As consumers feel the financial squeeze, they could be tempted by high-risk, unregulated products and services or they could become a target for scammers preying on moments of vulnerability
Its latest quarterly report said: “As consumers become financially squeezed, they are likely to be targeted by fraudsters and scams and also more likely to engage with high-risk and unregulated products such as cryptoassets.
“We are aware that scammers are targeting consumers searching for investments online.”
Meanwhile, the FCA also wrote to consumers it found to have been included in a mailing list being used by scammers to carry out “loan fee” or “advanced fee” fraud. It said this scam is becoming more common as living costs rise.
Mark Steward, executive director of enforcement and market oversight at the FCA, said: “As consumers feel the financial squeeze, they could be tempted by high-risk, unregulated products and services or they could become a target for scammers preying on moments of vulnerability.
“As a result, we’re doing even more to tackle false claims in adverts, issue prompt warnings to consumers, and we continue to engage with the largest tech and social media platforms as they also play an important part in protecting consumers from online harm.
“This is why changes to the Online Safety Bill to cover paid-for financial services advertising online are very much needed right now.”