Investment scam victims lose average £29,000

Victims of investment scams lost an average of over £29,000 last year, with a total of £197m of reported losses in 2018, according to data from Action Fraud, with the Financial Conduct Authority (FCA) calling for more vigilance on the part of investors

Action Fraud reported the total amount lost during 2018 was £197,465,740 from 6759 reports.

According to data from the FCA call centre, the most commonly reported scams involved investments in shares and bonds, forex and cryptocurrencies by firms that are not authorised by the FCA. Together they accounted for 85% (4,996 cases) of all suspected investment scams reported in 2018, which totalled 5,884.

People are warned to be particularly vigilant during the first quarter of the year, the peak investment season, as many look to invest before the tax year end.

The FCA says the profile of investment scams is changing as more and more people are being targeted online, moving away from the traditional cold call. Fraudsters are now contacting people through emails, professional looking websites and social media channels, such as Facebook and Instagram.

Last year 54% of those who ran a check with the FCA’s warning list, which includes details of firms the regulator knows are operating without its authorisation, had been contacted by potential fraudsters via online sources, compared to 45% in 2017.

Mark Steward, FCA executive director of enforcement and market oversight, said: 'Investment scams are becoming more and more sophisticated and fraudsters are using fake credentials to make themselves look legitimate.

‘The FCA is working harder than ever to help protect the public against this threat. Last year we published over 360 warnings about potentially fraudulent firms. And we want to spread the message so we can all better protect ourselves from investment scams.'

The FCA has produced a video with financial expert Alvin Hall to educate the public on the most common tactics used by investment scammers.

The regulator is urging people to be vigilant when making investment decisions, and to look out for six warning signs: unexpected contact; time pressure; social proof; unrealistic returns; false authority; flattery.

Spot the investment scam with Alvin Hall is here.

Report by Pat Sweet

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