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As savers contend with record low saving rates, many may be looking to investments as a way of boosting the return they get on their savings. Although investments are usually a risker option than most saving accounts, now investors are also having to face the possibility of not only losing their capital through poor investments but also through investment fraud.
Indeed, according to a report from Action Fraud, more than £78m has been lost though investment fraud during 2020, with victims losing £45,242 each on average. April 2020 alone saw a 29% increase in reported investment scams as the Coronavirus pandemic’s impact on the economy began making consumers worried about their finances.
A common method of defrauding investors is through cloned firms, where the fraudsters use the name, address and ‘Firm Reference Number’ (FRN) of genuine companies authorised by the Financial Conduct Authority (FCA) to con investors into transferring funds to the scammers.
The fraudsters can engage their potential victims through a number of channels. For example, the scammers will place adverts on social media platforms and search engines that encourage consumers to click through to a replica website of a genuine company – some may even clone the website domain name.
Another tactic used by fraudsters is calling potential investors who have put their contact details into genuine comparison websites. The scammers will pretend to be from well-known, legitimate investment firms or send sales materials linking to websites of legitimate firms.
Be aware that Moneyfacts.co.uk will never call you by phone to sell you any financial products.
To fool potential victims further, the returns being promised are often slightly better than the market rate, but still modest so that they do not arouse suspicion. It can be months after transferring funds to the fraudsters that victims realise they have been scammed.
“Clone investment scams are sophisticated and extremely difficult to spot. Last year, we received over 3,767 reports of clone scams to our consumer helpline,” explained Mark Steward, executive director of Enforcement and Market Oversight at the FCA. “Fraudsters use literature and websites that mirror those of legitimate firms, as well as encouraging investors to check the FRN on the FCA Register to sound as convincing as possible.
“If you’re considering an investment, visit the FCA Register to make sure the firm you’re dealing with is authorised. Use the contact details on our FCA Register, not the details the firm gives you, and check for subtle differences to avoid ‘clone firm’ scams. And if you’re still unsure, call our consumer helpline for further information. When it comes to clones, I cannot emphasise enough how important it is to double-check every detail.”
The FCA also advises consumers to never give out their bank account or credit card details unless they are certain of who they are dealing with this. If the consumer has given out this information, they are advised to tell their bank immediately. In addition to this, the FCA advises:
In addition to this, consumers should be wary of click-on ads on the google results page, or on other websites and instead only click on trusted links on genuine websites. For example, at Moneyfacts.co.uk, we ensure all our links send consumer through to genuine companies.
For more information about the types of scams criminals are carrying out and how to remain protected from them, read our story on the rise of finance scams since the start of the pandemic. For those considering equity release, read our story on how to avoid equity release scams.
Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. Moneyfacts.co.uk will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.
In light of the ongoing cost of living crisis in the UK, it is likely that the word “affordability” is on your mind. Added to this, if you are approaching your 40s and 50s, you could be shouldering many financial responsibilities.
In light of the ongoing cost of living crisis in the UK, it is likely that the word “affordability” is on your mind.
UK consumers have lost more than £25 million to scammers in 15 months since 1 January 2021. The number of screen-sharing investing scams rose 86% from July to December 2021 compared to the same period in 2020, according to the Financial Conduct Authority (FCA).
UK consumers have lost more than £25 million to scammers in 15 months since 1 January 2021.
Despite recent market volatility, nine of the 10 most popular stocks on eToro’s trading platform at the end of the year’s first quarter are tech-based. “Many investors are clearly ignoring short-term macro factors and are investing in tech because of the long-term opportunity,” said Ben Laidler, Global Markets Strategist at eToro.
At the end of quarter one, nine of the 10 most held stocks are technology-based.
In light of the ongoing cost of living crisis in the UK, it is likely that the word “affordability” is on your mind. Added to this, if you are approaching your 40s and 50s, you could be shouldering many financial responsibilities.
In light of the ongoing cost of living crisis in the UK, it is likely that the word “affordability” is on your mind.
UK consumers have lost more than £25 million to scammers in 15 months since 1 January 2021. The number of screen-sharing investing scams rose 86% from July to December 2021 compared to the same period in 2020, according to the Financial Conduct Authority (FCA).
UK consumers have lost more than £25 million to scammers in 15 months since 1 January 2021.
Despite recent market volatility, nine of the 10 most popular stocks on eToro’s trading platform at the end of the year’s first quarter are tech-based. “Many investors are clearly ignoring short-term macro factors and are investing in tech because of the long-term opportunity,” said Ben Laidler, Global Markets Strategist at eToro.
At the end of quarter one, nine of the 10 most held stocks are technology-based.
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