Many do not know how to spot investment scams, study shows
More than two-fifths (44 per cent) of people would consider turning to investments in the hope of bigger returns, a survey has found.
But a fifth (20 per cent) do not know where to get information and advice to help them with investing and nearly a quarter (22 per cent) do not know how to check whether or not an investment company is genuine, Nationwide Building Society said.
One in five (19 per cent) people believe an online advert is sufficient to prove a firm is genuine. This is despite recent concerns and warnings raised about fraudsters advertising online.
Nationwide's own data shows the number of investment scams reported by members in 2020 increased by 79 per cent compared with 2019, as fraudsters are convincing people to "invest".
Its survey also found 19 per cent of people would invest with someone contacting them via email after registering interest on a website.
And 7 per cent would invest with a company which contacted them out of the blue, which could also be a warning sign of a scam.
Ed Fisher, Nationwide's head of fraud policy, said: "One of the unfortunate side effects of the pandemic has been a rise in investment scams. “Criminals try to take advantage of any uncertainties and a low interest environment to target people with increasingly sophisticated tactics.
"And they are bold too - they even target victims again with 'recovery scams' by promisin ing to get their money back for an upfront fee. It's crucial to undertake proper research and due diligence before handing over your money.
"Being especially cautious is the best defence, even if you are proactively looking for an investment and you find what appears to be a legitimate company, you still need to confirm the site is genuine and you are dealing with someone who works there.
"And take care to question where the money is going. We will always warn you if an account name and number don't match, so if someone tells you to send it to a name that's different to the exact trading name of the firm, it could well be a scam.
"Always check the FCA (Financial Conduct Authority) Register and the FCA Warning List as it has listings of legitimate firms' details, and firms that are known to be impersonated."
more positive findings in Nationwide's survey, just over half (51 per cent) of people would check the FCA Register to check the company is authorised to offer investments, and 40 per cent would speak to their bank or building society, while just over a third (34 per cent) would speak to an independent financial adviser about investing.
Nationwide said scams have become more sophisticated. Its own data suggests payments made to "cloned" companies posing as legitimate brands have become more commonplace.
This tactic involves criminals copying contact details, websites and employee names of well-known firms.
Nationwide has further information on scams at https://www.nationwide.co.uk/ products/other/landing-page/ fight-fraud