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FCA: “The internet has ‘industrialised’ financial scams – and the volume of losses can be huge”

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    [​IMG]“I can’t believe that it’s been almost seventeen years,” says Beth Harris of her time with the Financial Conduct Authority (FCA), an organisation she joined after the reality of life as a lawyer didn’t fulfil her as she’d hoped. “The role at the FCA sounded interesting and I thought I could stay a few years, learn something, then move on. It was the only job I applied for – and I’m still here.”

    Beth is now Head of Department for the Unauthorised Business Division. She leads the team working to identify unauthorised financial activity and take action to stop it, whether through court action, issuing warnings or reaching out to Nominet to suspend domain names being used for criminal purposes. In 2020, 232 domains were suspended at the FCA’s request, compared to 48 in 2019. Much of the team’s intelligence comes from thousands of reports from members of the public – all of these are reviewed, before some proceed forwards into investigations.

    “It is quite emotional at times,” she admits. “Some of the reports we get from members of the public are just heart-breaking – I couldn’t tell you how often I have a little cry at my desk over stories of people who have been ruined financially.” It’s the balance of highs with lows keeps the work manageable, she says – “recently we had a judgment handed down by the High Court allowing us to distribute £3.4m to the investors scammed in a case. In 2020 we secured almost £6m to be returned to investors and obtained Court orders for over £14m. It doesn’t happen every day, but when we do catch a perpetrator and get justice and compensation for the victims, it makes it all worthwhile.”

    There is also the surety that she is doing something that “really matters” that keeps Beth so satisfied by her work at the FCA, “and I know that that the fantastic people I work with all feel the same. We’re united by a shared goal and it makes for a brilliant working environment. Plus the work itself is so rich and varied, it keeps me interested.”

    Her longevity with the FCA has given her long-term perspectives on the changing trends and she has observed first-hand the impact of the internet on financial fraud:

    “We’ve seen a huge increase in the ‘industrialisation’ of financial scams and harm. Before technology was so widely-used, it would take time to set up a scam entity and persuade consumers to invest, but now people can targeted more easily via social media and websites, and the volume of losses can be huge,” she explains.

    The anonymity the internet provides – and the speed at which criminals can adapt – also makes her work challenging. “At the FCA, we can identify the firms that we know aren’t authorised or might be acting illegally, so it’s fantastic to work with Nominet to be able to quickly disable the domains name and disrupt their activity.”

    Sadly, fraudsters work as fast as the FCA and will often contact their victims swiftly to claim ‘technical issues’ with the initial website and direct them to a newly-registered domain name. “It’s like playing whack-a-mole at times,” Beth admits, “which is why we are so excited about Nominet’s introduction of landing pages. This will enable us to share advice with anyone who arrives on the website and direct them to our ScamSmart site. If we can educate and support those consumers that are clicking on these domains, they won’t invest with these firms and will keep their money safe. That would be a great result.”

    Education and communication are of paramount importance, believes Beth, because “the only way to truly tackle the problem is to make everyone aware of how to check authorisation and how to spot the fraudsters.” She urges anyone considering investing to check with the FCA if the firm or individual is authorised and registered, as well as making sure they use the legitimate contact details as listed on the FCA website.

    “I would also encourage people to trust their instincts, as often we can feel if something isn’t quite right,” she says. “If you get that little niggle, stop and re-consider. ‘If in doubt, do without’ I say. If it sounds too good to be true, it probably is.”

    Beth is particularly empathetic to the plight of scam victims following a recent, raw experience herself. “It’s ironic, seeing as I work in financial fraud, but often you understand your own industry and not others. We were scammed by a builder who we’d paid to do renovation work on our house,” she admits. “When they keep telling you things need doing, giving technical explanations and being really nice about everything, you believe them.” It resulted in her renovations shuddering to a halt during the pandemic and leaving the family of four without a kitchen; “there were a lot of picnics, which my little boys loved but I didn’t!”

    The experience also reminded her of the shame and grief victims often feel when they fall foul of a criminal, which can result in them keeping quiet. “I urge people to come forwards and report,” she says. “Reports are how we can find and catch these criminals and perhaps, if we’re lucky, recoup some of the losses. Don’t feel ashamed – help us make a difference and protect others.”

    Read tips on how to avoid financial fraud or scams on the FCA ScamSmart website.

    The post FCA: “The internet has ‘industrialised’ financial scams – and the volume of losses can be huge” appeared first on Nominet.

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