Protecting Your Wealth from Financial Fraud: A Practical Guide

Financial fraud targeting individuals has grown in both sophistication and scale. UK Finance estimated that authorised push payment (APP) fraud alone cost UK consumers approximately £460 million in the first half of 2023, with total fraud losses running well above £1 billion annually. For HNW individuals — who have more to lose and are specifically targeted by certain fraud types — financial fraud poses a material threat to wealth.

Internationally mobile individuals face particular risks: distance from their home financial infrastructure, unfamiliarity with local scam patterns, and the complexity of legitimate international financial structures can make fraudulent schemes harder to identify.

This guide covers the main fraud types, the warning signs, how to verify a firm or individual, what to do if you have been targeted, and the protections available.

The Threat Landscape

Investment Fraud

Investment fraud encompasses a wide range of schemes designed to persuade victims to invest money that the fraudster then keeps. Common variants:

Advance fee fraud: the victim is promised an investment opportunity but must first pay fees, taxes, or administrative charges to release their funds. No investment exists; the fees are stolen.

Ponzi and pyramid schemes: early investors are paid returns using later investors' capital, not genuine investment profits. They inevitably collapse when new investment slows. Bernie Madoff's scheme, discovered in 2008, defrauded investors of an estimated $65 billion. Smaller Ponzi schemes operate continuously.

Boiler room fraud: victims are cold-called by persuasive salespeople offering shares in companies at below-market prices. The shares are either worthless or non-existent. The firm is not FCA-authorised. Once the victim has invested, the scammers disappear.

Cryptocurrency fraud: a variety of fraud types exploit cryptocurrency's technical complexity and regulatory gaps. Romance fraud (building an online relationship and then asking for cryptocurrency); fake exchange hacks; pump-and-dump schemes in small-cap tokens.

Authorised Push Payment (APP) Fraud

APP fraud involves persuading victims to send money to the fraudster's bank account by impersonating a legitimate payee (a bank, HMRC, solicitor, or financial adviser). The victim authorises the payment — hence "authorised push payment."

The most common variants:

• Impersonation of HMRC: a call claiming urgent tax must be paid or a warrant will be issued
• Conveyancing fraud: an email (often from a hacked or spoofed solicitor email address) providing fraudulent bank account details for a property purchase deposit
• Investment platform impersonation: a fake website mimicking a legitimate investment platform, where victims deposit funds

APP fraud has been a particular concern because, until October 2024, banks were not obligated to reimburse victims who had authorised the payment themselves.

Pension Liberation Scams

Pension liberation schemes promise to allow individuals to access their pension before the minimum access age (55, rising to 57 from 2028). These schemes typically:

• Claim that the pension can be transferred to an overseas scheme
• Charge large upfront fees
• Transfer the pension into unregulated, illiquid, or non-existent investments
• Leave the victim with a pension worth far less than before (or nothing) plus an HMRC "unauthorised payment" tax charge of up to 55%

Expats are disproportionately targeted — distance from their UK pension, anxiety about pension access rules in a foreign country, and legitimate schemes (such as QROPS transfers) creating cover for fraudulent approaches.

Clone Firm Fraud

A clone firm uses the name, FCA registration number, and contact details of a genuinely FCA-authorised firm to deceive victims. The fraudster presents themselves as the legitimate firm, uses its FCA registration to appear genuine, and then disappears with the victim's money.

Clone firm fraud is particularly dangerous because:

• The FCA number checks out as legitimate
• The firm name appears genuine
• Contact details look professional
• FSCS compensation does not apply (the authorised firm didn't receive the money)

How to Check Any Firm

The FCA Financial Services Register (register.fca.org.uk) lists every FCA-authorised and regulated firm in the UK. Before dealing with any financial firm or individual:

1. Check the firm's name on the FCA Register
2. Note the FCA Register number from the search result
3. Compare the contact details on the Register with the contact details given to you — this is the critical step for clone fraud detection. A clone firm will typically have different phone numbers, email addresses, or websites from the genuine firm listed on the Register
4. Check the FCA Warning List (fca.org.uk/consumers/warning-list-unauthorised-firms) for firms specifically flagged as acting without authorisation or as clones

If the phone number, email address, or website given to you does not match the Register, stop immediately and report it to the FCA.

For overseas investments or firms based outside the UK: check the relevant country's regulatory register. In the EU, national competent authority registers. In the UAE: DFSA register. In the US: SEC Edgar.

Red Flags: When to Stop and Verify

No legitimate financial adviser or investment firm will ever:

• Cold call you unsolicited about an investment opportunity (cold calling for financial products is banned in the UK in most circumstances)
• Guarantee returns: investments can fall in value; guaranteed returns are a hallmark of fraud
• Pressure you to decide quickly: legitimate investment opportunities do not expire in hours
• Ask for secrecy: being asked not to tell your bank, solicitor, or family is a major warning sign
• Use complex offshore structures you cannot understand or verify independently
• Accept payment in cryptocurrency or via unusual payment methods
• Be unable to be found on the FCA Register or equivalent

The "too good to be true" rule: investment fraud consistently offers returns that are above market rates. In a world of 5% cash rates and 7–9% long-run equity returns, an offer of 15% "guaranteed" is almost certainly fraud.

Protection Mechanisms

Confirmation of Payee (CoP)

Most UK banks now operate Confirmation of Payee for UK bank transfers. When you enter a sort code and account number, the bank checks whether the account name matches. A mismatch triggers a warning. CoP reduces (but does not eliminate) conveyancing and business payment fraud.

Payment Delays for New Payees

Some banks apply a voluntary delay (typically 24–72 hours) for large transfers to a new payee. In addition, payment service providers may now delay an outbound payment by up to 72 hours where they have reasonable grounds to suspect fraud, under rules that took effect on 7 October 2024. This provides time to reconsider or take advice before the funds leave.

APP Fraud Reimbursement from October 2024

The Payment Systems Regulator (PSR) introduced mandatory reimbursement rules for APP fraud from 7 October 2024. Under these rules:

• UK banks and payment service providers must reimburse victims of APP fraud in most cases
• The maximum reimbursement is £85,000 per claim
• Reimbursement is split equally between the sending and receiving bank
• Exceptions apply: gross negligence by the victim (ignoring multiple clear fraud warnings); "first-party" fraud (claiming fraud that wasn't); consumers who are specifically warned and still proceed

This is a significant consumer protection improvement. However: it does not cover overseas transfers, cryptocurrency payments, or payments made to overseas accounts. International investors remain more exposed than domestic ones.

Financial Services Compensation Scheme (FSCS)

The FSCS protects consumers when authorised FCA firms fail. Protection limits:

• Deposits: £120,000 per person per authorised firm (£240,000 for joint accounts), following the increase from £85,000 on 1 December 2025; a temporary high balance of up to £1 million is protected for six months
• Investment claims: £85,000 per person per firm
• Insurance: 100% of the claim with no upper limit for long-term insurance (such as life assurance and annuities)

Important limitations: FSCS covers failures of FCA-authorised firms — not fraud. If you invest with a fraudulent firm (unauthorised or a clone), FSCS does not apply. If you invest with an authorised firm that subsequently fails (insolvency), FSCS applies.

What to Do If You Have Been Targeted

Immediately:

1. Stop any further payments. If a payment is pending, contact your bank urgently to attempt a recall.
2. Contact your bank or payment provider. Explain you believe you are a victim of fraud. Request an immediate freeze.
3. Save all documentation: emails, letters, phone numbers, website screenshots, bank transfer details.

Report to:

• Action Fraud (actionfraud.police.uk): the UK national fraud reporting centre
• The FCA (fca.org.uk/consumers/report-a-concern-about-a-firm-or-individual): to report a firm acting without authorisation
• Your bank's fraud team formally in writing

Do not:

• Pay recovery agents or law firms claiming to be able to recover your lost funds (a secondary fraud targeting victims of the first fraud)
• Transfer further money to "unfreeze" or "release" funds already lost

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Financial fraud is constantly evolving. The examples and statistics in this article reflect the position as understood in mid-2026. Always verify contact details and authorisations before transferring money.

How Global Investments can help

Global Investments is an independent international advisory firm and provides clients with a trusted point of contact for all significant financial transactions. If a client receives an unsolicited approach, is uncertain about a financial product, or wishes to verify a firm, we are here to provide a second opinion before any money moves. We also help clients structure their financial affairs to minimise fraud exposure — through proper account controls, multi-party authorisation for large transactions, and clear professional adviser relationships. Contact our team if you have any concerns.