Investment fraud – placing funds in bogus shares, bonds and cryptocurrencies to name only a few – has been reported as one of the most common scams many fall victim to.
Unfortunately, the face of investment scams is changing. With the rise in technology and instant connectivity, fraudsters are moving away from traditional cold calling and front door-stepping to target victims online.
Fraudsters can be articulate and convincing, with what may seem like a credible website, customer testimonials and materials which are hard to distinguish from the real thing.
So, how can you keep your money safe from online fraudsters?
Spot the warning signs
Be on the lookout for any tell-tell signs that fraudsters are targeting you. For example, people are often more likely to trust a company if they have reviews and testimonials; unfortunately, scammers are known to fake such information to deceive prospective investors.
Other areas of concern include unexpected contact, the promise of unrealistic returns, pressure to make a quick decision and flattery.
Do your homework
All legitimate financial service firms must be authorised by the Financial Conduct Authority (FCA) – if they’re not it’s probably a scam.
Before signing on the dotted line, check the FCA’s register of authorised firms; likewise, check the FCA’s warning list to see if the firm has any previous history of operating without authorisation.
If it sounds too good to be true, it probably is
If you’re considering investing, make sure you seek impartial advice from a financial adviser. They will be able to weigh up the pros and cons and might even spot something suspicious you missed. After all, it’s better to be safe than sorry.
Reject unsolicited offers
Don’t be tempted by any unexpected investments – no matter how high the reward and low the risk may seem – without seeking professional advice first.
In addition, be careful of companies which claim to be based overseas as they may not be regulated.
Be aware of ‘clone firms’
A ‘clone firm’ is a common scam in which fraudsters pretend to be a genuine household name. Scammers may copy a website of an authorised firm and make small changes such as the phone number listed. By doing so, the website seems legit and may trick victims into believing the fraudster is who they say they are.
For further guidance on how to protect your money, visit our fraud and online security hub.
If you believe you have been a victim of fraud, click here for information on how to report your concerns.
