DON’T GET SUCKED IN BY THE SAVINGS SCAMMERS

Investment fraud is the most costly con of all, with victims losing £535m in just one year. Now learn the telltale signs to watch out for in the third part of the series that could save you a fortune

S CAMMerS have enjoyed their most lucrative year yet preying on investors, as the perfect storm of the pandemic and low-saving rates pushed millions of Britons online.

In the financial year ending April 2021, fraudsters trousered a shocking £535million from investment cons, making them the most costly of all scams.

With 20,989 incidents reported to Action Fraud, this works out as an average loss of £25,496 per saver — and many victims are unlikely to see their money again.

Despite campaigners raising the alarm about the scams for years, fraudsters continue to thrive, constantly resorting to new tricks to stay one step ahead.

There are two types of investment cons. The first involves fraudsters posing as a legitimate firm and vanishing the moment you hand over your money.

The second is where victims are flogged dodgy deals which fail to deliver the promised returns or are so high risk you stand to lose everything.

A survey by hargreaves Lansdown found that 79 pc of over-55s believed they had been approached by a scammer in the past year.

Just as worryingly, though, the research showed that far too many people were still unaware of the telltale signs: with more than one in four saying they wouldn’t be suspicious of an investment promising guaranteed returns of 10 pc.

So what do you need to know about investment scams — and how can you keep your savings safe?

In the past, a typical con involved fraudsters dangling high returns — often as much as 10pc per year — to lure in savers frustrated at low savings rates.

Over the years, scammers have touted everything from high-risk corporate bonds to niche investments such as wonder material graphene and holiday resorts as the ‘must have’ investment.

And, after the arrival of Bitcoin, crooks turned their attention to the cryptocurrency craze.

In 2020, savers were cheated of £113 million after being tricked into buying fake cryptocurrency investments alone.

The promise of risk-free returns is a definite red flag, but there are other warning signs, too.

Unlike genuine investment firms, for example, fraudsters are notorious for high-pressure tactics, bombarding potential victims with intensive sales calls.

But criminals have other tricks up their sleeve, many of which give them a dangerous edge. There has been a sharp rise in scammers posing as reputable investment firms, using fake websites and email addresses.

By placing adverts on search engines and social media, the fraudsters can then draw in people seeking investment advice.

The scams are highly sophisticated, with crooks investing time and money in building adverts and websites that look very realistic.

And by imitating genuine investment products, rather than ‘too good to be true’ schemes, it can make cons even harder to spot.

Banking trade body UK Finance estimates that 70pc of so-called ‘authorised frauds (where victims are tricked into transferring their money) begin with online adverts. The Financial Conduct Authority (FCA), the UK’s financial regulator, says it identified 1,200 adverts for investment scams last year.

efforts to stop this online crime boom has led to an extended cat and mouse game, with scammers on one side, and regulators and campaigners on the other.

Campaigners, including fraud experts and consumer groups, have repeatedly called for tougher rules to force the online giants to get tougher on fraudsters.

This summer, after years of pressure, Google finally agreed to tighten its rules in the UK on who can advertise investment products in search engine results.

Under the new rules, only firms regulated by the FCA can advertise financial investment products like bonds and savings accounts.

But reformers say the scammers have managed to get around the rules by pivoting instead towards luxury goods — which aren’t treated as financial products.

Anti-scam campaigner Mark Taber, who has spoken in Parliament about fraud, says he’s seen a sudden rise in adverts pushing the chance to invest in whisky.

‘The biggest red flag for me is that the adverts are aimed at people looking for information on investment and financial advice — not for whisky,’ says Mr Taber.

Now a powerful coalition of campaigners, including Which?, the Bank of england, and the FCA are calling on the Government to intervene, making web companies liable for fraudulent adverts posted on their platforms.

In particular, the coalition wants to see online fraud included in the Government’s Online Safety Bill, which is designed to prevent online crime and abuse.

‘Currently, the Bill fails to address fraudulent ads on online platforms, which can have such devastating financial and emotional consequences for consumers,’ says rocio Concha, Which? director of policy.

For the time being, campaigners say, the best option is for savers to be vigilant when managing their money and investments online. Which? has published a detailed guide to spotting potential scams, with telltale signs including being contacted out of the blue and getting high-pressure sales calls.

They also stress that anything that seems ‘too good to be true’ — for example, a bond paying 10pc a year — is likely just that.

But have these toolkits kept

pace with the changing online threat — and the rise of clone firms?

AN FCA survey suggested that 77 pc of savers — many of whom considered themselves scam-savvy — were unaware of the problems posed by copycat websites.

It can be possible to spot clone firms by looking closely at their websites (for example, using advanced search tools to find how long they’ve been online), but this is far from easy.

If you’ve received an email, check the address extremely carefully,’ says Sarah Coles, of investment company Hargreaves Lansdown.

‘If it’s a scam, the email address may include a misspelling of the company name, or random letters or numbers.

Sometimes, they will add a word related to the industry such as “bonds” or “investments”, so it’s worth checking if it’s the right address.’

Pay careful attention, too, to the FCA’s warning list of suspected clone firms — but remember this list might not be exhaustive.

New clone websites pop up every week, and many will slip through the net before regulators notice.

Ms Coles adds that the most reliable way to check you’re not dealing with a copycat scammer is to telephone the real firm.

If they’ve contacted you by phone, hang up and call them back on a number you already have for the company, or the number on the FCA register, found at register.fca.org.uk.

‘Scammers can be pretty sophisticated and they have fake websites and fake call centres. However, they won’t ever let you call back on a number you already have for the company,’ she says.

She reiterates that any unsolicited investment offers should be ignored — even if you initiate contact by giving out your phone number.

In reality, legitimate investment companies face extremely tight regulation governing how they market their products, and would be extremely unlikely to make such a call.

If you suspect you’ve already fallen for a scam, you should contact your bank immediately, as well as reporting it to the FCA and Action Fraud. Your bank will be able to investigate what has happened, and may, in some cases, be able to reimburse you (either in part or in full).

Be sure to let your bank know everything about the scam and whether there are any issues in your life that might have affected your decision-making.

Factors such as mental health difficulties, or life-changing events like bereavements, may be very relevant to the case and may strengthen the duty of care owed by your bank.