Investors lose £657m to fraud

Investors lose £657m to fraud

Victims of investment fraud have lost at least £657m in the past year, as scammers preyed on financial vulnerability caused by the coronavirus pandemic.   

In the 12 months to September Action Fraud received more than 17,000 reports of investment fraud, amounting to £657.4m in reported victim losses. 

The figures are a 28 per cent increase on the same period a year earlier and were driven by spikes in the summer months as the UK adjusted to life after lockdown and the ongoing crisis. 

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Pauline Smith, head of Action Fraud, warned scammers were preying on a population hit by job losses and lower incomes as a result of the pandemic. 

She said: "It has also caused a shake up in the economy in general, with interest rates falling, in a similar way to the financial crisis of 2008.

"All of these factors provide criminals with the opportunity to attract more people with their fraudulent investment schemes.

"Preying on people when they are at their most vulnerable really shows how low these criminals will stoop to make a profit for themselves."

Action Fraud urged consumers to seek regulated advice on investment opportunities, stating whilst paying for advice might seem "like an unnecessary expense" it would protect investors from being scammed. 

Just because a company has a "glossy website and glowing reviews" from alleged high net worth investors it does not mean it is genuine, Action Fraud warned. 

It added: "Fraudsters will go to great lengths to convince you they are not a scam."

Earlier this year the Personal Finance Society called on advisers to act as a barrier of defence between fraudsters and unsuspecting victims during the coronavirus crisis. 

It came as millions fell victim to fraudsters during the global lockdown, in particular pension scammers preying on the vulnerable amid economic confusion. 

The elderly have also increasingly found themselves a target of investment fraudsters, with Surrey Police recording six cases of this type of fraud involving vulnerable victims in May alone. The losses totalled more than £365,000.

Action Fraud was already warning of a "sharp rise" in investment fraud before the pandemic hit. In particular, crypto scams increased last year as a result of the public being less familiar with these types of investments and therefore more vulnerable to fraudsters.

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