Investment scams are designed to look like genuine investments.
On average, victims of investment fraud lost £32,000** each last year.
The Financial Conduct Authority (FCA) is urging over 55s to take their time to check that investment ‘opportunities’ are legitimate before they hand over their money. This comes as new research by the FCA reveals a fifth (22%) of over 55s, with above average incomes, suspect they were targeted by a fraudulent investment scam in the past three years, rising to a third (32%) of those aged 75 and over.
Recent pension freedoms and low interest rates offering poor returns on savings are making over 55s an increasingly attractive target for fraudsters. The new research is part of the FCA’s ScamSmart campaign, helping to protect consumers from investment fraud. The campaign features an interactive tool, the FCA Warning List, that helps investors find out more about the risks associated with an investment, and check a list of firms the FCA knows are operating without its authorisation.
Interestingly, more time and effort was being spent checking other high cost purchases, even though the money being spent is less. The average cost of major building work in our survey was £25,000, compared to the average of £36,000 spent on financial investments such as stocks or shares. Despite this, significantly more people (47%) said that they researched building work carefully and extensively, compared to those researching financial investments to the same extent (38%).
How to avoid investment fraud:
- Reject unsolicited contact about investments.
- Before investing, check the FCA Register to see if the firm or individual you are dealing with is authorised and check the FCA Warning List of firms to avoid.
- Get impartial advice before investing. Find out more at www.fca.org.uk/scamsmart
- No investment decision should be rushed. Be sceptical. Be suspicious. Ask questions and get answers you can verify.
* All figures, unless otherwise stated, are from YouGov Plc. The total sample size was 1,004 GB adults aged 55+, in social grade ABC1, with a gross household income of £30,000+ and/ or savings of £5,000+. Fieldwork was undertaken between 27th January to 6th February 2017. The survey was carried out online.
** Figures from Action Fraud released in October 2016