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Published on: 14 August 2020


What are investment scams?

When criminals try to convince you to move money to a fake fund or investment. They often claim you'll see a large amount of money back in return to tempt you.

But there is no investment and you will lose any money you transfer to them.

These scams can include investment in items such as:

  • gold
  • property
  • carbon credits
  • cryptocurrencies
  • land banks
  • wine.

What criminals do to appear genuine

They will often pretend to be from a genuine company (called a ‘clone firm’).

To look genuine, they'll use the name, ‘firm registration number’ (FRN) and address of firms and individuals authorised by the Financial Conduct Authority (FCA).

They might also use names and details of real employees working at the firm to make the scam more believable.


How to spot an investment scam

Warning signs that you might have been contacted about an investment scam include:

  • Unexpected contact
    In the past, scammers cold-called. Now, they might contact you online. This might be by email or social media. They may also contact you by post, or even in person at a seminar or exhibition.

  • Time pressure
    Scammers might offer a bonus or discount if you invest before a set date. Or they might tell you the offer is only available for a short period.

  • Social proof
    The fraudster may share fake reviews. They might claim other clients have invested or want access to the deal.

  • Unrealistic returns
    Fraudsters often promise tempting returns that sound too good to be true. For example, much better interest rates than elsewhere.

  • False authority
    They might use convincing documents and websites, claim to be regulated and speak with authority on investment products.

  • Flattery
    They may try to build a friendship with you to lull you into a false sense of security.

Note:

If an investment opportunity sounds too good to be true, it probably is.


Protecting yourself

Don’t be pressured into making a quick investment decision.

Here are some tips to stay safe:

  • Check that the firm is authorised by the Financial Conduct Authority (FCA)
    You can do this by using the register on the FCA’s website (opens in a new window).

  • Check that it isn’t a ‘cloned company’
    Fraudsters can pretend to be a genuine firm. Check for any other websites under the same name.

  • Make sure you use contact details on the FCA’s register
    Do not use the details given to you directly from the company, or by the person who made contact with you.


More help and information

The Financial Conduct Authority has created a guide on investment scams and how to protect yourself.