Scammers use cleverly cloned websites and glossy brochures to pose as regulated companies or create misleading profiles on platforms such as LinkedIn to appear legitimate. Many advertise on social media and search engines to reach millions of potential victims.
Criminal gangs have stolen £2.6bn since 2020
Almost 100,000 UK victims reported investment fraud to Action Fraud between January 2020 and September 2023, losing an average of almost £13m each week. The average victim lost £26,773.
In 2023 alone, 26,740 people were victims of investment fraud – the most people in the four years covered in this research – losing a colossal £527m between them.
This data was published by the Pensions Management Institute (PMI), following a Freedom of Information request to the City of London Police’s National Fraud Intelligence Bureau (which runs Action Fraud).
Robert Wakefield, President of the PMI, said: 'The number and sophistication of investment scams is ever-growing.
'By maintaining a healthy dose of scepticism and training yourself to spot some common red flags, you may be able to protect yourself and your loved ones from becoming victims.
'Increasing the amount of financial education provided in schools could also help to make people more aware of the risks of investment scams.'
What are the different types of investment fraud?
Investment fraud can be broadly broken down into the following categories:
Boiler Room Fraud Pyramid or Ponzi SchemesFraud Recovery Pension Liberation Fraud Prime Bank Guarantees Time Shares and Holiday Club FraudOther Financial Investment FraudInvestment scams on social media
Which? is particularly concerned that some tech giants are failing to remove repeat offenders even after they've been reported as scams.
Meta has systems to block scams and any financial services advertisers now have to be authorised by the Financial Conduct Authority to target UK users.
It told Which? it has removed the ad and associated account.
How to invest safely
The Financial Conduct Authority (FCA) offers these questions to ask yourself to help you spot the warning signs of an investment scam:
Is it unexpected?Do you feel pressured to act quickly?Does the offer sound too good to be true? Is the offer exclusively for you? Are they trying to flatter you?Are you feeling worried or excited?Are they speaking with authority?If you answered ‘yes’ to any of these questions or you’re unsure if a contact is genuine, you should verify credentials.
source https://www.which.co.uk/news/article/investment-scammers-pocketed-13m-a-week-in-the-past-four-years-a9vQM6h3T02a