The FCA has issued a warning to those over 55 to be vigilant about scam investment deals.
The regulator’s SmartScam campaign revealed that less than half of individuals surveyed know how to spot a fraudulent investment opportunity and that the average victim of a scam loses around £32,000.
The over 55 demographic is often the most vulnerable to pension scammers as they are more likely to have money to invest than an individual who is younger.
More than half of over 55s surveyed believe that acting quickly can be key to getting a good deal, and fraudsters often prey on this vulnerability by offering limited-time entry to investments.
Around a third do not discuss their investment decisions with others and fewer than half would be likely to seek impartial advice before making a financial decision.
Mark Steward, director of enforcement at the FCA, said over 55s should look out for warning signs, such as being contacted out of the blue, promises of low risk or guaranteed above market returns, special deals, time pressure and flattery.
“Be vigilant. Don’t let them push you into making a decision and parting with your money. Question their claims. Check the FCA Register and seek impartial advice. If in any doubt – don’t invest,” Mr Steward said.
The FCA has urged consumers to be cautious before they invest their money, as the Financial Ombudsman Service and the Financial Services Compensation Scheme cannot intervene when investments are with an unauthorised firm.
Kate Smith, head of pensions at Aegon, said that although low interest rates have made consumers more aware that especially high returns can be a warning sign of fraud, investors must continue to be careful.
“Fraudsters give a great deal of thought to their approach and there are some very sophisticated scams out there.
"Low interest rates mean people think twice about the promise of high returns but everyone needs to be vigilant and remember that there’s very rarely such a thing as guaranteed double digit returns like those promised in many scams," Ms Smith said.