Avoiding Financial Scams

In addition to causing disruption and distress, financial scams can result in victims losing significant amounts of money. Even the most savvy of investors have been caught out by financial scams that have only been detected after the damage is done.

With the plethora of investment opportunities now available it’s essential that anyone considering investing or altering their finances gains expert advice in order to avoid a financial scam.

Some of the most common financial scams occur when doing business with a person or company you’re unfamiliar with. For example, many home repair scams involve contractors knocking on your door and advising you of a problem with your property and offering to fix it for a fee. In reality, often no work is required at all or the price is greatly inflated. In order to avoid home repair scams, ensure that you obtain a number of quotes for any work, try and work with a firm who are registered and endorsed by the relevant agencies and obtain recommendations for firms where possible. In addition to this, customers should either pay on completion of the work or arrange a payment scheme to run over the course of the job rather than paying in full before any work is carried out.

When buying a financial product or making an investment, individuals should ensure that the company is licensed to sell the product you’re buying. By ensuring a company is registered with the Financial Services Authority, individuals can guarantee access to the Financial Ombudsman Service and Financial Services Compensation Scheme should they require it. It’s always worth getting a second opinion before making any investments and using independent advisors before making a decision. Additionally, people should question how their advisor gets paid. Many independent financial advisors receive commissions for placing accounts with specific companies which may lead them to give you potentially biased advice.

Although they are a number of financial scams which can cause people to lose money, by checking accounts and updating security information regularly people can protect themselves against financial scams. If you doubt the company you’re dealing with is legitimate or you suspect you’re the victim of a scam, always report the matter so it can be investigated. By being vigilant and refusing to share personal and financial information people can help reduce the number of financial scams and ensure they do not fall victim to them.

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