Investors turn ‘Sherlock’ on scammers
The Financial Conduct Authority (FCA) has found that 25 per cent of investors who avoided a scam had turned detective in a bid to swerve being conned.
It comes as the FCA launches its latest ScamSmart campaign which provides investors with the tools to identify and avoid scams, including a warning list to check before making any investment decisions.
The regulator has also created an augmented reality experience for investors, which sees several everyday objects representing the main warning signs, such as phone flagging unexpected contact or a clock flagging time pressure.
Analysis of data from the FCA’s consumer helpline revealed a 193 per cent increase in calls to the FCA in the last five years, as investors detected investment scam warning signs.
In 2022, more than £2m was saved by beady-eyed investors, who called the FCA to report the firm or individual before losing money.
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Two in five (39 per cent) respondents claimed that their investigative or research skills were helping them to spot the clues. A further 32 per cent relied on gut instinct to distinguish between genuine investment opportunities and potential scams.
The research found that detective investors cite finding mistakes (34 per cent) and requests for access to their personal details to secure the opportunity (34 per cent) as the most common tell-tale signs of scams.
Other warning signs that made investors suspicious included being contacted out of the blue (33 per cent) and being pressured to invest before an ‘offer’ ended (26 per cent).
Of the 1,036 investors the FCA surveyed who had avoided scams, a third (33 per cent) came across the opportunity via email, while a quarter (25 per cent) received a personal phone call.
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Once investors realised the opportunity was fraudulent, 42 per cent warned family and friends, while a further 27 per cent posted on social media to warn others.
“Scammers are becoming more and more sophisticated, coming up with different tactics, such as impersonation texts or calls, and using the cost-of-living pressure as a way to tempt investors into false opportunities,” said FCA executive director of enforcement and market oversight Mark Steward.
“Once money has been lost in this way, it’s difficult to get back, so if something seems too good to be true, it probably is. It’s great to see so many investors being able to spot the signs of a scam, and helping others to do the same. You don’t need to be a Sherlock Holmes to spot scams.
“Our Scamsmart advice and tips together with the FCA’s Warning List provides all the clues you need to sort the genuine investments from the fraudulent ones.”
If investors were to deal with an unauthorised firm, they would not be covered by the Financial Ombudsman Service or Financial Services Compensation Scheme if things go wrong.
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