Between September 2019 and September 2020 over 17,000 reports of investment fraud were made to Action Fraud, totalling £657.4 million in losses. But what exactly is investment fraud and how can you protect yourself from it?

With interest rates remaining at a record low, increasing numbers of people are looking to investments to make their savings work that little bit harder. But if you’re contacted by a cold caller who wants to offer you shares in a company you’ve never heard of, promising guaranteed returns, high interest rates and the chance to “flip your money”, it’s likely that you’ve been contacted by a fraudster.

What is investment fraud?

Investment fraud tends to follow the pattern of someone posing as an investment service provider, Financial Advisor or Fund Manager. They then convince you to transfer large sums of money into a company or service that is either worthless, part of an illegal pyramid scheme or doesn’t even exist at all.

More traditionally, investment fraud is carried out in call centres or offices known as “boiler rooms”, where cold callers scam individuals into buying fake or worthless shares with the false promise of high returns. However, in recent years there has been a rise in investment fraud taking place via social media, with some influencers and fake accounts known as ‘bots’, pushing bogus schemes and products in order to scam people.

How can you protect yourself?

Once you are familiar with the signs of investment fraud it is much easier to protect yourself from it. Before transferring any money, always follow these guidelines to stay safe…

Don't

• Take up offers of investments from cold calls or unsolicited emails, texts and social media messages. Genuine financial services will never do this.
• Give away your bank account details or personal information.
• Believe glossy brochures or professional websites. Fraudsters are highly adept at creating convincing marketing materials to make them look authentic.

Do

• Follow the ABC framework for fraud:
  Accept nothing, Believe no-one and Confirm everything.
• Treat all unsolicited calls, emails, texts and social media messages with caution.
• Check your bank account and credit card statements regularly for suspicious payments which you don’t remember making.
• Check the FCA register to see if an investor or advisor is regulated and what they are regulated to do.
• Call the company on the number listed on its FCA register listing to confirm the correct paying details. Genuine firms can be impersonated with convincing websites, so always check the register.
• Confirm the company exists by checking Companies House.