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nigel woollsey

Nigel Woollsey

Online Writer
Published: 21/05/2019

A warning has been issued today by the Financial Conduct Authority (FCA) together with Action Fraud regarding the rising number of crypto assets and forex investment scams. Reports of this kind of criminal activity tripled last year to over 1,800 recorded instances, with more than £27m lost to scams of this nature in 2018/19. However, in an alarming new trend, fraudsters are using bogus celebrity endorsements in order to dupe unwary investors into parting with their cash.

Social media platforms are being increasingly used to promote ‘too good to be true’ online trading platforms, accompanied by images of high-cost, luxury items, such as expensive watches and cars. Once an innocent investor has been enticed into clicking on a web link, they will be taken to a professional-looking website where they will be encouraged to invest. At first, the customer is assured by the fact that the first investment has made a profit, before the scammers then approach the victim to invest yet more funds as well as introducing friends and family to the bogus scheme. Eventually, however the returns stop, the account is closed without warning and the criminals disappear with the victim’s money. It has been estimated that the average loss due to this kind of fraud is around £14,600 per victim.

The introduction of fake celebrity endorsements is a relatively new development that has added an additional lure for the unwary on social media platforms. This is a ploy designed with the sole intention of lending credibility to the scammer’s offers.

Pauline Smith, director of Action Fraud, said: “People need to be wary of fake investments on online trading platforms. It’s vital that people carry out the necessary checks to ensure that an investment they’re considering is legitimate.

“Action Fraud is pleased to be partnering with the FCA to raise awareness of online trading scams, and we hope it will help prevent more people falling victim. Remember, if you think you have been a victim, contact Action Fraud.”

This advice was echoed by Mark Stewart, executive director of Enforcement and Market Oversight for the FCA: “'We’re warning the public to be suspicious of adverts that promise high returns from online trading platforms.

“Scammers can be very convincing, so always do your own research into any firm you are considering investing with to make sure that they are the real deal. Before investing online, find out how to protect yourself from scams by visiting the ScamSmart website, and if in any doubt – don’t invest.”

The FCA has also produced a simple series of rules for would-be investors encouraging people to stay safe while scrolling:

  • Don’t assume it’s real – professional-looking websites, adverts or social media posts don’t always mean that an investment opportunity is genuine. Criminals can use the names of well-known brands or individuals to make their scams appear legitimate.
  • Stay in control – avoid uninvited investment offers whether made on social media or over the phone. If you’re thinking about making an investment, thoroughly research the company first and consider getting independent advice.
  • Make the right checks – firms providing regulated financial services must be authorised by the FCA. You can check whether they are authorised on the Financial Services Register. Use the contact details on the Register, not the details the firm gives you, to avoid ‘clones’.
  • Every report matters – if you have been a victim of fraud or cybercrime, report it to Action Fraud.

Moneyfacts.co.uk also has a number of helpful online guides, which can help you steer clear of online financial scams as well as ideas on how to keep your online banking safe.

Credit cards and overdrafts can be incredibly useful forms of borrowing if used wisely, but if not, they can quickly become lead weights – and many borrowers unwittingly get themselves into unmanageable debt as a result.

Tesco Bank has announced that it will not offer any new mortgages and is actively looking for options to sell its existing mortgage portfolio; a decision it has made due to challenging market conditions.

Tesco Bank started offering mortgages in 2012 and currently serves over 23,000 customers with total lending balances of £3.7bn. Moneyfacts.co.uk research has found that it currently offers 77 mortgage products, all of which are fixed-term products spread across 75% - 95% loan-to-value (LTV) tiers.

This decision by Tesco Bank is not good news for consumers as it means that there will be less competition within the market and less choice. Despite this, the fixed rate mortgage market remains highly competitive and there are still some very competitive fixed rate mortgages available for borrowers at a range of LTVs. In addition to this, even with Tesco Bank no longer offering new mortgages, this competition within the fixed-rate mortgage market is expected to continue.

Darren Cook, finance expert at Moneyfacts, said: “It is sad news when a provider decides to leave the mortgage market as this clearly partially reduces customer choice and interest rate competition. First-time buyers may especially miss Tesco Bank’s products as it offered a 95% loan-to-value mortgage, giving those with only a 5% deposit the chance to get onto the property ladder. Rates in the fixed rate mortgage market have reduced significantly over time and it is clear that margins – especially at the lower LTV tiers – are narrow, with little margin to cut them much further.”

Commenting on Tesco Bank’s decision, Gerry Mallon, chief executive of Tesco Bank, said: “In recent years, challenging market conditions have limited profitable growth opportunities. Our focus is on how we best serve Tesco customers and align our resources effectively to their needs while ensuring that our offer remains sustainable in the long term.

“To that end, we have made the strategic decision to focus on serving a broader range of customers in more specific areas, which means moving away from our mortgage offer. We have therefore chosen to cease lending to new customers and announce our intention to explore a sale of our portfolio. Our priority in any sale is to complete a commercially acceptable transaction with a purchaser who will continue to serve our customers well.”

While the interest rate on any mortgage might be the first thing to come to mind when searching for a deal, borrowers should also make time to consider those with an incentive package. Thankfully, the number of deals that offer cashback, a free valuation or free legal fees have risen year-on-year, as mortgage lenders look to entice borrowers with additional perks rather than rates alone.

Moneyfacts has been at the heart of the financial world for over 30 years, and today, we’re pleased to announce the launch of our brand new website.

The new and improved Moneyfacts.co.uk is now open for business, offering our trademark impartial, accurate and comprehensive comparison charts in a whole new way.

We’ve worked hard to create a site that fulfils our purpose of helping consumers find the products they need quickly and simply, allowing for easy comparisons with all the necessary information readily available. Whether they’re looking for a savings account, mortgage, loan or anything else in our repertoire, the sleek design of our new site makes it easy to find the financial information needed in just a few clicks, and of course, we still have all the latest news and informative guides to complete the package.

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