More than £2.6bn has been stolen through investment fraud in the UK since the start of 2020.
Following a Freedom of Information request to the City of London Police National Fraud Intelligence Bureau, the Pensions Management Institute found there were 98,525 victims of investment fraud between January 2020 and December 2023.
The data showed victims typically lost an average of £26,773 to these investment scams over the period amounting to £13mn a week being stolen by fraudsters.
In 2023, 26,740 people were victims of investment fraud, the most victims in the four years covered in the research.
These investors lost £527mn to these scams, equivalent to more than £1.4mn a day.
Boiler room fraud was one of the most common types of investment fraud costing victims £553mn over the period starting in 2020.
Since January 2020, 20,789 people in the UK have been victims of this type of fraud according to the research.
Boiler room fraud consists of victims being cold called by fake stockbrokers and encouraged or persuaded to buy shares or bonds in worthless, non-existent, or near-bankrupt companies.
Ponzi or pyramid schemes were the other common type of investment fraud with 12,323 victims in the UK since the start of 2020, losing £499mn.
A Ponzi scheme is where investors are recruited to make payments in return for promises of abnormally high profits.
However, no investment is made on their behalf, early investors are paid returns with the investment money received from the later investors until the scheme collapses.
The data also revealed there were 1,451 victims of pension liberation fraud since 2020 resulting in losses of more than £19mn for victims.
Robert Wakefield, president of the Pensions Management Institute, said: “Our research shows that a shocking number of people are falling victim to investment fraud. It is concerning that every year thousands of people are losing millions of pounds to financial scams in the UK. The number and sophistication of investment scams is ever-growing.
“By maintaining a healthy dose of scepticism and training yourself to spot some common red flags, you may be able to protect yourself and your loved ones from becoming victims. Increasing the amount of financial education provided in schools could also help to make people more aware of the risks of investment scams.”
alina.khan@ft.com
