What is it?
You’re convinced to move your money into a fictitious fund or to pay for what later turns out to be a fake investment which promised a high return.
You may be targeted by cold callers or presented with fake investment opportunities promoted on search engines and social media sometimes pressuring you to act quickly but also in many cases asking you to leave your details in order for a call back to be arranged. Some may seem genuine because of the use of celebrity endorsements or testimonies from people who’ve allegedly received large profits but in reality, these are fake.
Criminals often set up cloned websites purporting to be legitimate investment firms and may even send out paperwork with official branding to add a layer of credibility to their scams. You may also receive an initial payment or even a couple of payments with “returns” on your investment to convince you to invest larger sums of money.
Criminals spend hours researching you for their scams and may provide you with details of previous investments and shares you hold.
These scams include convincing you to invest in markets such as gold, property, carbon, cryptocurrencies such as Bitcoin or even wine.
How to spot an investment scam
- You see ads within your social media feeds, sometimes celebrity endorsed, offering high returns on investments
- You’re contacted out of the blue by phone, email or social media about an investment opportunity
- You’re offered a high return on your investment with apparently little or no risk
- You’re told the investment opportunity is exclusive to you
- For some types of investment, you’re pressurised into making a decision with no time for consideration
Examples of investment scams
Dave was due to retire in five years and noticed that he wasn’t getting a great a return on his current investments. He worried that he wouldn’t have enough money to retire on comfortably, so he decided to go online and see what deals he could find that might give him a bigger return. Dave typed ‘invest my money’ into the search engine and got lots of results. He decided to look at the first one that came up and saw a great return on a site which looked professional and detailed. He filled in his details on the contact form and waited for someone to get back to him. Within a couple of days, Dave got a call from a very friendly lady who talked him through the details and sent him lots of information by email. He decided to invest a small sum of money. A couple of months later, Dave looked at his account via the portal that he’d signed up to online and to his delight he’d doubled his money! Dave decided to invest a far larger sum of money this time. After six months, Dave wanted to cash out on his investment, so he contacted the firm in order to start the process. He didn’t get a response. He later tried to login to his account on the portal only to find that he could not. He tried desperately on numerous occasions to contact the firm and then one day the website could no longer be found. Dave had lost his life savings to a criminal.
Arun saw a ‘celebrity endorsed’ social media post advertising the promise of big returns on Bitcoin. He contacted the company and following a phone call with a “trader’ was convinced to make a payment of £300. After logging into his trading account on the website, he saw his investment increase. Arun continued to invest more money following pressure from another “trader” from the company and was persuaded to take out a loan sourced by the criminal. Arun only realised it was a scam when he was unable to access his account to withdraw his money or contact the company.
Bonds and Shares
Maisy received a cold call from a ‘stockbroker’ at an investment firm, offering her shares in a company about to be listed on the major stock exchange. Maisy was told she would receive a huge return and was urged to invest before the company ‘goes public’. She was given the ‘firm registration number’ and addresses of individuals ‘authorised’ by a regulator convincing her it was legitimate.
Maisy proceeded to buy the shares. She realised she had been scammed when she was unable to contact the investment firm and couldn’t get her money back.