Low interest rates are pushing the over-55s into considering a wider range of unfamiliar investment products that may be scams, according to the Financial Conduct Authority.
A study published today (25 May) by the regulator showed four in 10 people have moved money out of savings into investments as the sustained period of low interest rates has seen over 55s adopting riskier investment behaviour in a bid to get a better rate of return.
Of those questioned, more than a quarter chose to invest in unregulated investment products while 23 per cent say they are considering investing in unfamiliar types of investments in the future.
More than a quarter of those who had fallen victim to investment fraud did so having bought an unregulated product through an unauthorised firm.
Mark Steward, director of enforcement at the FCA, said: “You don’t need to be gullible to lose money to a scam or fraud. Fraudsters target financially sophisticated people too, who often don’t like to ask what might sound like silly or basic questions.
You don’t need to be gullible to lose money to a scam or fraud. Fraudsters target financially sophisticated people too. Mark Steward“If you are contacted out of the blue about an investment opportunity that sounds too good to be true then it probably is. We would urge you to be sceptical.
“If you do experience investment fraud or suspect it, report it; our research found 60 per cent of those that have experienced investment fraud have not reported it, so the problem could be greater than we know and by reporting it you are helping us to protect others.”
The report also revealed over 55s are receiving a higher volume of unsolicited calls from unauthorised investment firms, with those being contacted by firms they had not heard of reporting a 40 per cent increase in this type of contact.
Three in 10 retirees reported being contacted by a firm offering investments in the last 12 months with nearly four in 10 being contacted as many as three times.
Countdown’s Nick Hewer, who used to be Alan Sugar’s right hand man on The Apprentice, is supporting the FCA’s campaign.
He said: “We should all be outraged at the lengths that callous and criminal investment scammers will go to cheat people out of their money.
“Scammers are embedding themselves into people’s lives and pretending to be close friends of their targets, frequently the elderly and those living alone, before draining their life savings on a false promise of great returns through bogus investments.
“The tactics that these criminals use are very, very sophisticated; they could suck in even the savviest of investors, something that everyone should be aware of.
“I too have been targeted by unsolicited calls from scammers and would advise that if you ever receive a call offering you the investment of a lifetime, just put the phone down, as I did.”
Adviser View
Antony Devine, a financial adviser with London-based Devine Financial Management, said: “I have not found that my clients are looking at unregulated products because of low rates.
“If the client wanted to start looking at things like overseas property or something like that I would steer clear of it.”
damian.fantato@ft.com
