Investment Scams

Written by: Maralyn Hutchinson of local Teddington Solicitors Kagan Moss

A study by the Financial Conduct Authority (FCA) reveals increasing risk of retirees being scammed via investment fraud.  Low interest rates are a key driver as investors seek higher returns and over 65s with savings in excess of £10,000 are three and a half times more likely to fall victim to investment fraud.  More than a quarter of over 55s falling victim to investment fraud are scammed via an unauthorised firm selling unregulated products, such as wine, diamonds and land.  The FCA is urging retirees to take the necessary precautions before making investments, in a bid to help combat widespread investment fraud.

Over a quarter chose to invest in unregulated investment products and 23% say they are considering investing in unfamiliar types of investments in the future.  Over a quarter of those who have fallen victim to investment fraud did so having bought an unregulated product through an unauthorised firm.  Typically, 4 in 10 reported a sharp rise in the volume of unsolicited investment calls over the last 12 months and this is a common tactic used by investment fraudsters.

When questioned, a fifth of retirees holding unregulated products revealed they have invested more money into unregulated products over the last year than ever before.  Those considering investing in unregulated products in the next 12 months indicated that they would invest an average of over £4,000, with land, wine and art as popular investment choices.

We would urge you to:  Be sceptical.  Be suspicious.  Ask questions.  

Do your own checks before investing; check the FCA ScamSmart website, the FCA warning list and the FCA register to see if those that are asking for your money are the real deal.  

The research found that 60% of those that have experienced investment fraud have not reported it, so the problem could be greater than we know and by reporting it you are helping us to protect others.

The Financial Conduct Authority says:

  • Investment fraud is often sophisticated and difficult to spot.
  • Fraudsters can be articulate and appear financially knowledgeable.
  • They have credible websites, testimonials and materials that can be hard to distinguish from the real thing.

So be a ScamSmart investor

  • Reject unsolicited contact about investments.
  • Check the FCA Warning List.
  • Get impartial advice.

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