The UK’s Financial Conduct Authority (FCA) has warned investors to ever-vigilant of investment scams, after data reveals £197m in losses for 2018.
Victims of scams lost over £29,000 on average last year, after the fraudsters used more sophisticated tactics to persuade victims to invest, the FCA claimed.
Data compiled by the regulator’s call centre indicated that the most commonly reported scams were around investing into shares and bonds, forex and cryptocurrencies by companies not authorised by the FCA. In total, these accounted for 82 per cent of all suspected scam victims last year.
One of the findings of the FCA was that fraudsters are moving away from cold calls and into emails, professional websites and social media channels like Facebook and Instagram.
The FCA Warning List is a tool set up to help consumers understand the risks associated with investment and all of the known companies operating without authorisation with the FCA.
To help raise awareness, the FCA is reiterating six points to detect a fraudulent investment. These include unsolicited contact, time pressures on investing, false social media reviews and news, unrealistic returns, false authority, and overly flattery.
FCA executive director of enforcement and market oversight Mark Steward said, ‘The first quarter of the year is a common time for people to make their financial plans for the year, including investments. But before you invest do your homework.
“Always check the FCA’s register to make sure you’re dealing with an authorised firm and use the contact details on our register, not the details the firm gives you, to avoid ‘clones’. Also check the FCA Warning List of firms to avoid. Remember, if in any doubt – don’t invest!’
‘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.’
To lower the chance of falling victim to a scam, the SCA advises to reject all unsolicited investment offers whether made online, on social media or over the phone. Before making an investment, investors should check the FCA register to see if they are registered or not, and investors should seek some impartial advice before investing.
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