RegulationOct 22 2014

FCA targets investment scammers

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The FCA has unveiled a national campaign to warn people about investment fraud and scammers, particularly those that target vulnerable pensioners.

According to the City watchdog, its Scamsmart website includes a tool for consumers to check the trustworthiness of possible investments.

The website identifies known fraudulent activity and offers advice on how to recognise scams, as well as providing real-life case studies. The regulator will fund the campaign using money recovered from fraudsters.

Last year the FCA secured criminal convictions against four people involved in unauthorised activity, issued 295 consumer warnings and had 61 websites promoting suspected boiler rooms removed.

Martin Wheatley, chief executive of the FCA, warned that fraudsters could be articulate and appear financially knowledgeable.

He said: “Those operating investment scams use very sophisticated techniques to build trust, and can dupe even experienced investors out of their savings. With large numbers of people at risk, it’s important to know how to spot the signs of a potential scam.

“We would caution against anyone taking a risk on a firm or individual who is not authorised by the FCA. Our message is simple: don’t accept a cold call.”

When asked about how the scheme would reach its target audience, an FCA spokesperson said: “We are not just relying on the Scamsmart website and social media to get the message to people. We are running advertisements in national newspapers, Classic FM and LBC. We are also working closely with organisations such as the Money Advice Service and Age UK, and using their established networks to reach a wider audience.”

Key Figures

Investment fraud costs the UK £1.2bn a year.

There have been 4,700 calls about suspected investment fraud since June 2013.

The average victim loses £20,000.

Source: Action Fraud

Adviser view

Patrick Connolly, spokesman for Avon-based Chase de Vere, said: “Many people could be suckered into bad investments. New pension flexibility, which people will be reading about and seeing on the news, will make them more vulnerable.”