Investment scams involve criminals contacting their victims through cold calling, phishing emails, adverts, or messages via social media platforms, offering them non-existent or worthless investment opportunities with the promise of massive returns.
These scams have been around for a long time, but the scammers operating them are forever growing in sophistication with their approach to persuade people into investing. According to data revealed by Action Fraud UK, over £197,000,000 was lost to these scams in 2018, with an average of £29,000 lost per victim. It’s important to note that this figure stems just from reported cases and there’s no way of knowing how many cases go unreported.
According to the FCA, the most commonly reported scams involved investment opportunities in cryptocurrency, foreign exchange, shares and bonds. They also state that more of these scams are being carried out online, particularly through emails, adverts and social media sites, and are straying away from the more traditional cold calling approach.
Even though more of these scams are being carried out online, it is still important to be aware of how you could be contacted over the phone.
The scammer will contact you out of the blue, after normally getting your phone number from a company data breach or by buying it from other corrupted companies, and they will immediately start pressuring you into investing into their scheme. They will explain all the different benefits of investing and promise you massive, unrealistic returns on your money. They will also pressure you into depositing money whilst you are on the phone, claiming that this is a one-time offer or they have inside knowledge that share prices are about to go up. It’s likely that they will be very friendly in order to make you trust them.
If you question their legitimacy, they may instruct you to look at their website online, which will be a fraudulent website created by the scammer for this purpose.
You will receive an unsolicited email which will detail the investment opportunity. The display name may be a spoof of a legitimate company, so it is very important to look at the sender’s email address to see where it has come from. The email is likely to contain minimal information, but it will contain a link to take you to their website to find out more.
This is where they will ask you to enter personal information and bank details in order to place your first deposit. Once they have your details, they will be able to steal money from your bank account.Advert
Fraudulent adverts can appear on genuine websites, so it is important to know that just because you’re on a safe website, it doesn’t mean the adverts are safe too.
The advert will take you to a fraudulent website, designed to look as authentic as possible and may even state that they are regulated by the FCA. This is where you will be prompted to enter you personal and bank details in order to make your investment.
There are several warning signs that you can look for in order to tell whether an investment opportunity is a scam.
1. Unexpected contact
The scammer will contact you completely out of the blue - this could be a cold call, email, advert on a website, or a message through a social media site. If you have never heard of the company and have never shown an interest in investing into their proposed scheme, it is best to ignore it.
The scammer will put a lot of pressure on you to invest within a certain time frame. They may claim that they have insider knowledge and share prices are about to go through the roof so it’s essential you invest now. They may also offer you a bonus or discount if you sign up quickly – this is a ploy to get you to act without thinking about it.
3. Fake evidence
They may show you fake reviews and messages they’ve had from ‘other investors’ to prove that their opportunity is genuine and others have made a lot of money.
4. Unrealistic returns
This is an essential one to look out for – the scammer will promise that you will make huge returns on your money in a very short period of time which is unrealistic and can never be guaranteed.
5. Keep it quiet
They may tell you that this opportunity is just for you and not to tell anyone else. A legitimate company would never ask you to do this, and it is an attempt by the scammer to keep themselves hidden as much as possible.
To reduce the chance of falling for an investment scam, you should carry out the following tasks before going any further:
If you believe that you’ve handed money over to a scammer, you should report it to Action Fraud UK or the FCA, as well as your bank, immediately after you have become aware. Read how to get your money back after a scam.
At this point, it is also very important to remain even more vigilant as once you have fallen for one scam, it is very likely that you will be contacted again with other incentives.
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Last updated: 23 January 2020 | © KIS Bridging Loans 2020 |