FSL Chain Mail (18th May 2021)

FSL’s Chain Mail is a regular blog containing links to news articles that we think are worth sharing.

The pandemic has forced many businesses and individuals to increase their digital presence causing a marked increase in cyber scams and attacks.  This edition of Chain Mail looks at the latest cyber news and what is being done to mitigate the risks to investors.

This FT article shares real examples of cyber attacks on wealthy investors and highlights the rise in online fraud.  Hargreaves Lansdown examine the details and perils of clone firm investment scams.  These are “financial operations which involve fraudsters using literature and websites that mirror the details of authorised firms, like pension providers or investment platforms”.  They offer fake investment products and it is estimated that they have taken over £78m from UK investors during 2020.

The FCA are working with ministers to tackle the growing issue.  A new Online Safety Bill was announced this month, though there are concerns that it down not go far enough.  This article in This is Money provides comments from the FCA’s CEO and states that the new bill “will only tackle fraudulent investment schemes posted by users on social media – leaving out the avalanche of scams being spread through digital ads and websites”.

Concerns are also being voiced by industry trade bodies and leading wealth management firms.  FT Adviser reports that “seventeen groups – including adviser trade body PIMFA – have joined forces to warn about online scams and lobby the government to include methods to tackle this issue”.  The group have sent a joint letter to the Home Secretary and Digital Secretary asking for further action.  This follows warnings raised by Quilter CEO, in April, who wrote to the Prime Minister directly about the Bill’s limitations.  Money Marketing publishes key parts of the letter in their article and emphasise the stats that show that clone firm scams have increased by 600% since 2010.

The Online Safety Bill was published on 12th May and aims to help safeguard young people and clamp down on racist abuse online, uphold democratic debate online and reduce financial fraud on social media and dating apps.

Look out for our next edition with more FSL Chain Mail links.