Almost £10m lost to investment scams since March lockdown
Saturday 28 November 2020
Sophisticated fraudsters have ratcheted up their operations to target retail investors, as incidents of large-scale investment scams nearly quadrupled since July, new data published today by the Investment Association reveals.
The scams clone genuine investment management firms through impersonated products, websites and documentation, and then promote the fake products through fake price comparison websites and adverts on social media and search engines. Since the IA’s last warning of the risks posed by fraudsters to investors in July, the total number of reported incidents of these scams has nearly quadrupled from approximately 300 to 1175 in October*. The estimated total reported loss to savers from these scams has more than doubled from approximately £4m in July to £9.4m in October with over 200 people affected.
Retail investors are today being urged to be extra vigilant in order to protect themselves from these scams. Anyone who suspects fraudulent activity should follow the advice of the National Crime Agency. The IA is also working closely with stakeholders to call on the Government to bring online investment scams within the scope of the Online Harms Bill before it is passed through Parliament, to ensure the legislative framework for identifying and closing down these investment scams is robust.
Chris Cummings, Chief Executive of the Investment Association, said:
“In a year clouded in uncertainty, organised criminals have sought opportunity in misfortune by attempting to con investors out of their hard-earned savings. The investment management industry is working closely with the police and regulators to stop these scams, and is collaborating with our partners in Government to close them down and prevent them being advertised in the first place.
“Fraud and scams come in many different disguises. That’s why, as we approach the festive period, we urge savers and investors to be as vigilant as possible to protect their investments and think very carefully about the risks of fraud when making investment decisions.”
The advice of the National Crime Agency is to:
- Stop: Taking a moment to stop and think before parting with your money or information could keep you safe.
- Challenge: Could it be fake? It’s ok to reject, refuse or ignore any requests. Only criminals will try to rush or panic you.
- Protect: Contact your investment manager immediately if you think you’ve fallen for a scam and report it to Action Fraud. Speak to your bank as soon as possible if you believe you have transferred money to a scam.
Notes to Editors:
- *As of 12 October 2020.
- The FCA’s dedicated live scam page, where individuals can research and avoid identified scams, ScamSmart, can be accessed here.
- If you’re the victim of a scam, you can report a case of fraud online on the Action Fraud website here. You can also report adverts for scams through the Advertising Standards Agency’s new reporting service here.
- More resources on spotting and tackling scams and criminal activity in relation to investments can be found on the National Crime Agency and Action Fraud
For further information, please contact:
Katie Martin, Head of Communications: [email protected]
T: +44 (0)20 7269 4655
Helen Ayres, Communications Manager: [email protected]
T: +44 (0)20 7269 4620
David Parton, Communications Executive: [email protected]
T: +44 (0)20 7269 4625
IA press office: [email protected]
T: 020 7269 4696
About the Investment Association (IA):
- The IA champions UK investment management, supporting British savers, investors and businesses. Our 250 members manage £8.5 trillion of assets and the investment management industry supports 113,000 jobs across the UK.
- Our mission is to make investment better. Better for clients, so they achieve their financial goals. Better for companies, so they get the capital they need to grow. And better for the economy, so everyone prospers.
- Our purpose is to ensure investment managers are in the best possible position to:
- Build people’s resilience to financial adversity
- Help people achieve their financial aspirations
- Enable people to maintain a decent standard of living as they grow older
- Contribute to economic growth through the efficient allocation of capital.
- The money our members manage is in a wide variety of investment vehicles including authorised investment funds, pension funds and stocks and shares ISAs.
- The UK is the second largest investment management centre in the world, after the US and manages over a third (37%) of all assets managed in Europe.