How to spot an investment scam

Money Advice Service

Every year thousands of people lose millions of pounds due to investment scams. The internet and advances in digital communications mean these kinds of scams are becoming more common and harder to identify. Thankfully there are some warning signs, which you can use to avoid falling victim to scammers. Read on to discover how to spot, avoid and report an investment scam.

What is an investment scam?

Investment scams aim to get unsuspecting people to hand over money. On the face of it, they can seem perfectly legitimate, appearing knowledgeable with websites, testimonials and marketing material.

The most famous kind of investment scam is a Ponzi Scheme, where money is collected from new investors to pay previous investors. Eventually the money owed is greater than the money being collected and the scheme collapses, leaving all the investors out of pocket.

Be aware

Some scammers have very convincing websites and other online presence, which makes them look like a legitimate company. Always check with the FCA to make sure they’re registered.

Today, due to the internet and digital communications, investment scams can be much more complex. Some of these scams are so convincing, even professional investors have fallen victim to them.

Since the pensions freedoms were introduced in April 2015, older people are particularly vulnerable to investment scams because they can access cash lump sums from pension pots.

All investment scams have one thing in common. They claim to be able to offer high levels of return for very little risk.

How to spot an investment scam

Make sure you are aware of the warning signs which might indicate an investment opportunity is a scam.

  • Unsolicited approaches by phone call, text message, email or a person knocking on your door.

Is it a scam?

The FCA’s ScamSmart website has a tool to help you check if an investment or pension opportunity is a scam.

There’s also lots more information about avoiding the latest scams. Visit the ScamSmart website.

  • When a firm doesn’t allow you to call it back.
  • Where you’re forced to make a quick decision, or are pressured into doing so.
  • Contact details you are given, or found on their website, are only mobile phone numbers or a PO box address.
  • You are being offered a high return on your investment, but are told it’s low risk.
Find out more about tackling financial fraud on the Take Five website.

How to protect yourself from investment scams

To avoid being caught out by a scam, make sure you follow these simple rules.

  1. Reject any unsolicited calls, emails, text messages or visitors to your door. Legitimate investment companies will not cold call, or contact you out of the blue.
  2. Check the FCA register of regulated companies, or the FCA warning list.
  3. If you are thinking about an investment opportunity, seek independent financial advice from an FCA regulated firm.
Find out how to be a ScamSmart investor.

What to do if you think you’ve been targeted

If you think you’ve been targeted by an investment scam, please report it to the FCA Scam Smart website.

If you have lost money to a suspected investment fraud, you should report it to Action Fraud on 0300 123 2040 or online at www.ActionFraud.police.uk.

Beware of being targeted in the future, particularly if you lost money to a scam. Fraudulent companies might take advantage of this and offer to help you get some or all of your money back.

This article is provided by the Money Advice Service.

Some important information about Rest Less Money

We want you to understand the positives, but also the limitations of using our site. We operate in a journalistic manner and therefore all information, guidance or suggestions provided are intended to be general in nature, and you should not rely on any of the information on the site in connection with the making of any financial decision.

When we set out to build Rest Less Money, we wanted to be a trusted place where you could find helpful information about financial matters affecting the over 50s. As a free to use resource, we try hard to provide the best information we can, but we cannot guarantee that we won’t occasionally make mistakes. So please note that you use the information on our site at your own risk, and we can’t accept liability if things go wrong.

Key things to remember when using Rest Less Money:

We do not offer financial advice – As a journalistic site, it’s important to know that we do not provide financial advice. You should always do your own research before choosing any financial product so that you can be certain it is right for you and your specific circumstances. If you are in any doubt, please seek professional financial advice from a regulated financial advisor.

No Liability – please note that you use the information on Rest Less Money at your own risk and we can’t accept liability for how you choose to use the information given on our site. We will often provide links to content or products and services available on other third-party websites. These are provided purely for your convenience and we cannot be held responsible for any content, or any of the products and services offered on any website that we link to.

 

Accuracy of Information – We try to make sure that all the information provided on Rest Less Money is correct at the time of publishing as we want it to be the most helpful resource possible. Sadly, we are not perfect however, and so we can make no guarantees as to the completeness, accuracy, adequacy or suitability of the information available on the site.
Whilst we work hard to try and provide accurate information, deals and prices can change, so whilst they may be correct at the time of writing, providers may subsequently decide to alter them later – so always double check first.

A final note on the Rest Less Community Forums – always remember that anyone can post their opinion on the Rest Less Community Forums, so it can be very different from our own opinion and may not be factual or well researched. Always be wary of any content posted on the forums and be sure to do your own research and due diligence on anything suggested. 

We hope you find Rest Less Money a useful resource and we would welcome your feedback at [email protected] on how to make it even better. For more information on any of the above you can read our full terms and conditions.

Some important information about Rest Less Money

We want you to understand the positives, but also the limitations of using our site. We operate in a journalistic manner and therefore all information, guidance or suggestions provided are intended to be general in nature, and you should not rely on any of the information on the site in connection with the making of any financial decision.

When we set out to build Rest Less Money, we wanted to be a trusted place where you could find helpful information about financial matters affecting the over 50s. As a free to use resource, we try hard to provide the best information we can, but we cannot guarantee that we won’t occasionally make mistakes. So please note that you use the information on our site at your own risk, and we can’t accept liability if things go wrong.

Key things to remember when using Rest Less Money:

We do not offer financial advice – As a journalistic site, it’s important to know that we do not provide financial advice. You should always do your own research before choosing any financial product so that you can be certain it is right for you and your specific circumstances. If you are in any doubt, please seek professional financial advice from a regulated financial advisor.

No Liability – please note that you use the information on Rest Less Money at your own risk and we can’t accept liability for how you choose to use the information given on our site. We will often provide links to content or products and services available on other third-party websites. These are provided purely for your convenience and we cannot be held responsible for any content, or any of the products and services offered on any website that we link to.

 

Accuracy of Information – We try to make sure that all the information provided on Rest Less Money is correct at the time of publishing as we want it to be the most helpful resource possible. Sadly, we are not perfect however, and so we can make no guarantees as to the completeness, accuracy, adequacy or suitability of the information available on the site.
Whilst we work hard to try and provide accurate information, deals and prices can change, so whilst they may be correct at the time of writing, providers may subsequently decide to alter them later – so always double check first.

A final note on the Rest Less Community Forums – always remember that anyone can post their opinion on the Rest Less Community Forums, so it can be very different from our own opinion and may not be factual or well researched. Always be wary of any content posted on the forums and be sure to do your own research and due diligence on anything suggested. 

We hope you find Rest Less Money a useful resource and we would welcome your feedback at [email protected] on how to make it even better. For more information on any of the above you can read our full terms and conditions.

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