What is an investment scam?

14 February 2022 - by Santander

This was sent to me by Santander UK the information is a great help to avoid investment scams.

Opportunities to invest are everywhere and becoming increasingly accessible. But how can you know whether your investment is genuine and not just another scam? We want to help you protect yourself by sharing some key information.

In the first six months of 2021, UK losses from investment scams rose by 95% compared to the first half of 2020, from £55.2 million to £107.7 million.

Investment scams happen when people are enticed to invest in worthless, cloned, or non-existent items such as cryptocurrencies, carbon credits, property, land, gold, and wine. It’s even possible to quite literally invest in fresh air! The problem comes when the investment doesn’t turn out to be as good as it seemed, and your hard-earned money is lost.

Criminals are using increasingly sophisticated ways to trick people. Exploiting new opportunities such as social media adverts with fake endorsements or influencers, WhatsApp, TikTok and cloned webpages. They’ll offer a better opportunity for your savings pot; low risk with high returns. To make sure you’re really convinced, they may even show their own successes as part of their sales pitch, but the investment opportunity may be significantly exaggerated, or even non-existent.

How can I protect myself?

Know the warning signs and make the right checks. It’s almost that simple.

Be ScamSmart – the Financial Conduct Authority (FCA) has created ScamSmart, an online tool to help consumers identify if their investment is a scam or not.

Make the right checks – firms providing regulated financial services must be authorised by the FCA. You can check whether they are authorised on the FCA’s register.

Avoid clones (fake companies that look genuine) – only communicate using the contact details on the FCA Register, not the contact details you’ve found on an online advert, or that the firm gives you when they make contact.

Don’t assume it’s real – professional-looking websites, adverts or social media posts don’t always mean that an investment opportunity is genuine.

Stay in control – if you’re thinking about making an investment, thoroughly research the company first and consider getting independent advice.

Take extra crypto care – don’t allow anyone to set up a cryptocurrency wallet, upload ID documents or manage investments remotely on your behalf.

To find out more about how to protect yourself against investment scams, visit the FCA website