Sophisticated investment scams cost victims £197m warns financial watchdog

VICTIMS OF investment scams reported losing more than £197m in total in 2018, figures from Action Fraud show.

People may need to be particularly vigilant during the first quarter of the year as many look to invest before the tax year ends in April.

The average loss last year was over £29,000, as fraudsters use increasingly sophisticated tactics to persuade victims to invest by using fake credentials and contacting people through websites made to appear legitimate and professional-looking social media posts.

People should reject unsolicited investment offers, check whether a firm is authorised before investing by using tools from the Financial Conduct Authority (FCA) and also get impartial advice first, those combating scams said.

The FCA said call centre information shows the most commonly reported scams involved investments in shares and bonds, the buying and selling of currencies and trading in crypto-currencies by firms that are not authorised.

It said fraudsters’ tactics are changing, with people increasingly being targeted online, moving away from the traditional cold call scam.

Fraudsters are now contacting people through emails, professional-looking websites and social media channels, such as Facebook and Instagram, it said.

Last year, 54 per cent of those who checked the FCA’s “warning list” had been contacted by potential fraudsters via online sources, up from 45 per cent in 2017.

Mark Steward, of the FCA, 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.”

The Financial Conduct Authority regulates 58,000 financial services firms and financial markets in the UK.