FCA launches agency checker device to assist shield buyers and savers from deluge of scams

Around 800,000 people fell victim to investment and pension scams in the 12 months to May 2024, the UK’s financial watchdog has revealed, as it launches a new online tool that is says can help people avoid scams.

The Financial Conduct Authority has today launched its ‘firm checker’ tool, which it says could ‘significantly reduce their chances of falling victim to fraud’.

The tool provides users with information on both FCA authorised and unauthorised financial firms operating in the UK, so they can make informed decisions before investing money with a company.

The new tool is similar to the FCA’s existing register, but is designed to offer a more simple and straightforward way to check if they are engaging with a legitimate financial company.

The move comes as FCA data indicates instances of authorised push payment (APP) fraud most commonly arose after victims saw fraudulent investment and pension products advertised on social media, in 17 per cent of cases, or were contacted via phone calls, in a further 17 per cent.

The FCA says it can be hard for consumers to tell if they are dealing with a legitimate entity in these cases.

The FCA aims for the tool to be used by consumers before deciding to invest with a company

The tool will help people weed out dodgy firms, with unauthorised firms, those linked with fraudulent activity and those cloning legitimate firms being flagged in search.

For example, the firm checker provides genuine phone numbers for companies, meaning users can check that they are in contact with real firms.

FCA authorised firms must follow FCA rules and meet their standards. 

Users of authorised firms can also complain to the Financial Ombudsman if something goes wrong, and are more likely to benefit from protection from the Financial Services Compensation Scheme. 

Scammers often operate websites that are designed to appear as legitimate investment companies, while others appear as clones of real investment companies.

The FCA aims for the tool to be used by consumers before deciding to invest with a company.

Sheree Howard, of the FCA, said: ‘Ruthless fraudsters are constantly evolving their tactics so they can steal money from innocent victims.

‘Whether you’re considering an investment, pension opportunity, loan or other financial service, use firm checker to confirm the firm is authorised and help fight financial crime.’

The FCA’s 800,000 figure is based on extrapolated data from a survey of 17,950 from the FCA. 

Actual reports of fraud are much lower as many victims never come forward.

Action Fraud received just 25,843 reports related to investment fraud in 2024, accounting for a loss of £649million by victims.

Since then, the likelihood is that these scams are now affecting even more people, as scammers increasingly leverage artificial intelligence to commit fraud at scale.

Nick Sacre-Hardy, interim chief risk officer at Quilter, said: ‘Fraud is a hugely prevalent issue that can devastate people’s financial resilience. 

‘800,000 people losing money to investment or pensions-related scams in the space of just 12 months is a harrowing figure, and the FCA’s new checker is a step in the right direction towards helping to reduce the number of victims.

‘There also remains an onus on the financial services industry to ensure customers are better protected. 

‘Firms must be committed to investing in better fraud detection and consumer education to help prevent scams from happening in the first place.

‘However, they must also ensure that victims receive fast, fair treatment if things go wrong.’

People consider making investments can use the FCA’s firm checker tool here, in order to ensure the firm they intend to use is authorised to operate in the UK.