How to show scams a red card to keep your money safe and away from danger

How to show scams a red card to keep your money safe and away from danger

Scams are sadly part and parcel of the modern financial landscape. Whether it’s push-payment fraud in which fraudsters try to convince you to act quickly without thinking about it, or complex investment schemes that seem too good to be true, scammers are always inventing new ways to access your hard-earned wealth.

Data shows that they’re generally quite successful at it, too – in fact, financial industry body UK Finance reported that criminals stole £609.8 million in the first half of 2022 alone.

As a professional footballer, your unique career and level of wealth might make you particularly susceptible to being targeted by scammers. Many current and former pros have spoken about the unfortunate situations they’ve found themselves in as a result of these false schemes and promises, with some of these issues even coming from within the world of football.

Losing your money to a scam could seriously damage your long-term financial health, perhaps preventing you from living your desired lifestyle or even retiring when you want. This underlines the importance of staying vigilant and only choosing legitimate ways to save and invest your money.

So, find out some of the tell-tale signs of scams, and how to successfully avoid them to keep your money safe.

If it sounds too good to be true, it probably is

One of the major indicators of a scam is in it simply sounding too good to be true, which is exactly the case in the story of former Premier League player, Richard Rufus, and his fraudulent investment scheme.

You might have seen the news in January of this year that ex-Charlton Athletic defender Rufus was jailed for seven and a half years for financial fraud.

Rufus was found guilty on four counts of fraud by false representation and money laundering, and one of carrying out activity without authorisation.

FTAdviser reported that in total, Rufus conned his friends and family out of £15 million for a so-called “foreign currency exchange scheme”, claiming to only trade 5% of the capital in a “high return and low risk” investment.

Unfortunately for these individuals, it was all a Ponzi scheme – Rufus used any money to pay back his previous investors. He also used it to live a life of luxury, reportedly spending £300,000 on shopping, car finance, travel, and restaurants in just two and a half years.

In this case, Rufus’s scam had a hallmark sign of being fraudulent – he promised large returns with little risk made from a complex investment scheme that only he understood.

No investment is free from risk and generally, risk and reward are positively related; the greater potential for reward often means the need for taking on more risk.

So, if anyone ever promises you large or even guaranteed returns for little risk then take care, as it may well be a scam. If it sounds too good to be true, that’s because it often is.

Your money is best left to authorised experts

Dealing with investments is well-known to be tricky, which is why there are many qualifications and certifications that legitimate advisers must have before they are legally allowed to provide their services.

However, this doesn’t prevent scammers from claiming to have the necessary knowledge they need – indeed, there’s a reason that “carrying out a regulated activity without authorisation” is one of the charges Richard Rufus was convicted of, as he was providing a service that he did not have permissions to.

Sadly, Rufus is not the only former player to have been embroiled in a financial scandal. Another notable example is that of former Wolves midfielder, Michael McIndoe.

McIndoe was investigated by police after going bankrupt in 2015, with an alleged trail of out-of-pocket investors left behind him. At one time, according to the Athletic, McIndoe’s list of investors included major Premier League names, such as Robbie Keane, Jimmy Bullard, and Gabby Agbonlahor.

The Daily Mail reported at the time that McIndoe had promised around 300 former footballers returns of 20% on investments, while then living a lavish lifestyle including trips to Marbella and spending large amounts of money on champagne and parties.

Instead of seeing any return, the Daily Mail reported losses for those in the scheme to be around £30 million, with subsequent figures in the Athletic stating that five players from his time at Wolves lost around £2.6 million between them alone.

McIndoe’s case is slightly more complex than Rufus, as the investigation was ultimately dropped and he has since apologised for his behaviour. As the Athletic reports, McIndoe insists that he “never set up an investment or Ponzi scheme that offered participants the chance to make big profits”, making it entirely possible that he never intended to scam those around him.

But regardless, both McIndoe and Rufus show the importance of only investing your money with experienced and authorised financial professionals.

In general, it’s sensible to steer clear of individuals who do not have the qualifications or authorisations from regulators such as the Financial Conduct Authority (FCA). Even if they do have good intentions for your wealth, their lack of knowledge and experience could see you lose out.

You can find out whether a firm is authorised by the FCA by checking the Financial Services Register on their website.

Common signs of scams to watch out for

Scams come in various shapes and sizes, and you can see how easy it would be to be drawn into one – just ask anyone who fell victim to either Rufus or McIndoe.

To help keep your money safe, it can be useful to familiarise yourself with some of the common signs of scams. This could include:

  • Being contacted out of the blue by someone you do not know, whether that’s by phone, text, or email
  • High-pressure sales tactics, trying to force you into parting with your money
  • Large, guaranteed returns on your investment
  • Complex investment schemes that are difficult to understand
  • Lack of proper authorisation, such as not being registered with the FCA.

If someone approaches you with a so-called investment opportunity, take a moment and ask yourself: is this real? If the scheme has any of these features, or something just doesn’t feel right, don’t be afraid to say no and wait until you’ve had a chance to speak to an expert.

Get in touch

If you’d like to work with an experienced, fully authorised and regulated firm to help you find the best ways to manage your wealth, we can help at ProSport.

We’re expert financial planners who specialise in working with professional footballers like you.

Email or call 01204 602909 to speak to us today.

Please note

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.