How to avoid investment fraud: advice on investing safely.

Have you ever received a phone call, email or text – or seen a post or advertisement on social media – offering a great investment? If so, have you been tempted to find out more? Or perhaps you’ve actually invested some money.

Investments are a favourite trick used by fraudsters to steal your money … either funds you’ve put aside ‘for a rainy day’ or life savings to be used for a dream holiday or your retirement. Between 2020 and the end of 2023, nearly 100,000 people in the UK fell victim to investment scams, totalling £2.6 billion or £13 million every week*. These figures refer only to reported scams, so are likely to be considerably higher.

*Pensions Management Institute

There are more types of investment scams than we have room to list here, but they are almost always very convincing, with professional looking communications, correspondence and websites, and even seminars. Some feature quotes from ‘satisfied clients’. Some scams offer you high returns at low risk, others offer normal returns. Whatever the case, it is almost certain that you will not get your hard-earned money back.

Protect yourself from investment scams

Consider that if an individual or organisation contacts you randomly about an investment opportunity, it is likely to be either a scam or an investment carrying high risk.
Consider that in the UK, almost all financial services firms must be authorised by the Financial Conduct Authority (FCA), which operates the Financial Services Register and Consumer Helpline. Details can be found on the Get Safe Online website.
Learn to spot the classic signs of an investment fraud, such as unrealistically high returns (although this is not always the case), undue pressure or limited time offers. Over-familiarity or flattery, absence of a physical address or being requested to provide remote access to your device.
If you receive a cold call offering an investment, do not engage in conversation, but instead end the call by either disconnecting straight away, or after saying “No thanks, I’m not interested.”
If you receive an online or text communication about an investment, ignore it and if it’s an email, delete it. Do not click on any links or attachments.
Consider registering with the Telephone Preference Service and Mailing Preference Service to reduce the number of unsolicited calls and letters you receive.
Callers may pretend they are not cold calling you by referring to a brochure or an email they have already sent.
Ignore unsolicited offers of help in recovering money you have lost to a scam, as this will undoubtedly be another scam.

Other advice

Check that the organisation is genuine, and not a ‘clone firm’. Always use the contact details on the FCA Register, not in the communication. You could also check whether its website is likely to be legitimate or fraudulent at www.getsafeonline.org/checkawebsite
Seek impartial financial advice or guidance before investing. Make sure that any firm you deal with is regulated by the FCA.
You can find information on investing and how to find a financial adviser from the Money Advice Service, or an industry representation body such as PIMFA.
The government operated MoneyHelper service has information on investing and how to find a financial adviser.

Reporting investment scams

If you have paid money or given your bank account details to a firm or individual you think may be operating a scam, tell your bank immediately.
If you are suspicious that an approach about an investment has been made by a fraudster, contact the FCA Consumer Helpline on 0800 111 6768 or using its reporting form.
Report to Action Fraud on 0300 123 2040 or online at www.actionfraud.police.uk
If you think the scammer is impersonating an authentic business, report the attempted or actual fraud to that business.
If you have agreed to transfer your pension and now suspect a scam, contact your pension provider straight away. They may be able to stop a transfer that has not yet taken place.

Find more free, easy-to-follow advice on investment, cryptocurrency, pension and other financial scams at getsafeonline.org