Savers reported more than £2mn worth of scams to the Financial Conduct Authority in 2022, with calls to the regulator up 193 per cent in the past five years.
Research published by the FCA today (February 21) found that an increasing number of consumers are conscious of the tell-tale signs of a scam and have been contacting the FCA to report it before losing money.
An analysis, commissioned by the regulator, included a survey of 1,036 UK adults who currently or previously have held investments, and have avoided a suspected scam.
According to the respondents, finding mistakes in material and receiving requests for personal details were the two most common signs of a scam, with each spotted by 34 per cent of respondents.
Two in five of the respondents (39 per cent) said their investigative or research skills helped them spot the clues, but 34 per cent said they were relying on “pure gut instinct” to distinguish between a genuine investment opportunity and potential scams.
The fact they were contacted out of the blue alerted 33 per cent of respondents to the possibility that it may be a scam, while being pressured to invest before an ‘offer’ ends was another big tell-tale sign, alerting 26 per cent of respondents.
The research comes as the FCA launches its latest ScamsSmart campaign, which aims to equip investors with the tools to identify and avoid scams.
The FCA’s executive director of enforcement and market oversight, Mark Stewart warned that scammers are becoming increasingly sophisticated.
He said they are 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.
“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,” Stewart said.
“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,” he added.
A third of those surveyed by the FCA said they came across a scam ‘opportunity’ via email, while a quarter received a personal phone call.
Once investors realise the opportunity was fraudulent, 42 per cent warned family and friends, while a further 27 per cent shared the scam on social media to warn others.
To help remind consumers of the warning signs of a scam, the FCA has created an ‘augmented reality’ experience for investors to use via Instagram. It sees several every day items representing the main warning signs of fraudulent investments.
Responding to the FCA’s research, AJ Bell’s head of retirement policy, Tom Selby said the current economic climate is the perfect setting for scammers to be successful.
“It has never been more important for savers and investors of all ages to be on their guard to the risk of scams. The cost-of-living crisis is straining the budgets of millions of households, increasing financial vulnerability and providing an ‘opportunity’ for fraudsters to tempt people to part with their hard-earned savings,” Selby said.
He added: “While anyone can be the victim of financial fraud, pension savers over the age of 55 who can access their retirement pot flexibly are an obvious target.
“In many cases, someone’s pension will be the most valuable financial asset they have, with the possible exception of their house.”
jane.matthews@ft.com
