Fraud can take a variety of forms and fraudsters are very good at coming up with new and ingenious ways of conning people out of their hard-earned cash. So it's important to be aware of the tactics they use and how to guard against becoming their next victim.
This year, the Investment Association (IA) has seen more and more incidents of large-scale investment scams.
Scammers clone genuine investment management firms by creating impersonated products, websites and documents, and then promote the fake products through fake price comparison websites and adverts on social media and search engines.
Since the IA last warned investors about the risks posed by fraudsters in July, the total number of reported incidents of these scams has nearly quadrupled from approximately 300 to 1,175 in October.
Over the same period, the estimated total reported loss to savers from these scams has more than doubled from approximately £4m in July to £9.4m in October, with over 200 people affected.
Anyone who suspects fraudulent activity should follow the advice of the National Crime Agency:
- Stop: Taking a moment to stop and think before parting with your money or information could keep you safe.
- Challenge: Could it be fake? It's ok to reject, refuse or ignore any requests. Only criminals will try to rush or panic you.
- Protect: Contact your bank immediately if you think you've fallen for a scam and report it to Action Fraud, the UK's national reporting centre for fraud and cyber crime.
You should always be suspicious if you are contacted out the blue about an investment opportunity -- whether via a cold-call, an e-mail or an approach on social media, says Action Fraud.
It recommends using a financial advisor accredited by the Financial Conduct Authority (FCA) -- and use the FCA's register to check if a company is regulated. Fidelius is authorised and regulated by the FCA and our FCA reference number is 188615.
Just because a company has a glossy website and glowing reviews from 'high net worth' investors does not mean it is genuine, the organisation points out. Fraudsters will go to great lengths to convince you they are not a scam.
And remember, if something sounds too good to be true, it probably is.
Figures from Action Fraud show that it received just over 17,000 reports of investment fraud between September 2019 and September 2020, amounting to £657.4m in reported losses -- a 28% increase compared with the same period last year.
Reports spiked in May, June, July, August and September 2020 as the country adjusted to life after lockdown.
"The coronavirus outbreak sadly led to many people losing their job or having to manage with a lower income than they were used to," Pauline Smith, head of Action Fraud, explained.
"It has also caused a shake up in the economy in general, with interest rates falling, in a similar way to the financial crisis of 2008.
"All of these factors provide criminals with the opportunity to attract more people with their fraudulent investment schemes."
At Fidelius, we know that when it comes to investments there is no one size fits all -- everyone has a different approach. That's why we start by assessing your requirements and attitude to risk, so you can be comfortable and confident with the investment options we recommend.
Contact us today to discuss how we can help you achieve your goals and secure your future.