Over 65s most at risk of fraud
People aged over 65 are most at risk of being targeted by con artists, as the recession sees a hike in the level of fraud in the UK.
The City watchdog, the Financial Services Authority, has warned that criminals are increasingly focusing on people aged 65 and over, with 35% of fraud victims in this age group last year.
It seems that older members of society are most at risk of fraud because they fail to properly protect themselves from con artists, with 41% of those questioned unaware that personal details in passports, driving licences and mortgage applications could be used to steal their identities.
Chris Pond, director of financial capability at the FSA, says: “Fraudsters, like all criminals, tend to prey on the most vulnerable people and our research shows this is definitely the case with criminals who commit financial crimes. This is a clarion call to everyone that we cannot sit back and let honest people lose their hard earned money to unscrupulous individuals.”
The City watchdog has now teamed up with Age Concern and Help the Aged to raise awareness of the issue. Michelle Mitchell, charity director for Age Concern and Help the Aged, says: “Older people have worked a lifetime to save what money they have and to see that money stolen is simply unacceptable.”
Meanwhile, the City of London Police has warned boiler room fraudsters are using the recession to their advantage with the lure of high returns in difficult times - sucking in thousands of private investors every week. The scammers are increasingly targeting women and younger males as they try to get their hands on people's redundancy money.
But new profiles from the City of London Police reveal that those who have fallen foul of the scams are most likely to be men over the age of 50 with a long history of investing. Transcripts of boiler room activity suggest that staff still prefer to target men as "women ask too many questions".
The elderly are still seen as easy prey, with scammers becoming increasingly aggressive in their sales ploys with more victims encouraged to remortgage their homes or cash in life insurance policies.
At the same time, the fraudsters are becoming more professional in their swindling efforts, often staging "shareholder meetings" in large reputable hotels in cities such as London or Edinburgh. They are also using British bank accounts to make the transactions seem more credible.
The City of London Police reports 100 new calls a week from people who have list sums ranging from £3,000 to £1 million. It has recovered over £900,000 for investors in the last five months.
Detective chief superintendent Stephen Head, head of the Economic Crime Department, says that boiler room fraud is on the rise as people become more desperate for an income in the recession.
"This latest information shows the ruthless approach of the criminals behind boiler rooms. It seems they are prepared to target anyone, however vulnerable, and will take their last penny if they can," he adds.
Generally thought of as being interchangeable with life assurance, but isn’t. Life insurance insures you for a specific period of time, at a premium fixed by your age, health and the amount the life is insured for. If you die while the policy is in force, the insurance company pays the claim. However, if you survive to the end of the term or cease paying the premiums, the policy is finished and has no remaining value whatsoever as it only has any value if you have a claim. For this reason, life insurance is much cheaper than life assurance (also called whole of life).
The Financial Services Authority is an independent non-governmental body, given a wide range of rule-making, investigatory and enforcement powers in order to meet its four statutory objectives: market confidence (maintaining confidence in the UK financial system), financial stability, consumer protection and the reduction of financial crime. The FSA receives no government funding and is funded entirely by the firms it regulates, but is accountable to the Treasury and, ultimately, parliament.
This is an umbrella term for an organisation, usually unlicensed by the financial authorities, which uses forceful, persistent and highly aggressive telephone sales techniques to sell unlisted or non-existent securities to private investors. In the majority of cases, the shares being sold are worthless and the boiler room vanishes, leaving the investor out of pocket. Although they boast impressive UK addresses, the firms operate from boiler room “hotspots”, such as Spain, Switzerland, Dubai, Japan, Bermuda or the US, so they are outside the remit of the Financial Services Authority.