Reports of investment scams have risen by almost 200% in just five years according to the Financial Conduct Authority (FCA). And the good news is that a staggering £2 million was saved by investors in 2022, as they informed the FCA about a suspected scam before money was lost.
Nevertheless:
- Scammers are becoming more and more sophisticated
- A range of different tactics are being used
- Fraudsters are using the cost-of living crisis to target victims and “tempt investors into false opportunities”
- Fraudsters are also targeting people’s retirement savings.
When it comes to investment scams, crypto fraud is a particular area of concern.
Common scam techniques include luring potential investors with fake celebrity endorsements and “pump-and-dump” schemes. The latter happens when fraudsters spread false or misleading information – usually on social media – to “pump” up the price of a stock. Once it has hit a desired high, those behind these schemes quickly “dump” their shares at the inflated price. This can result in investors losing significant amounts of money. Such schemes can be especially convincing when backed by ‘credible’ social media influencers who flaunt their luxury lifestyles online.
Reasons people gave for reporting a potential investment scam to the FCA included:
- Gut instinct (32%)
- Mistakes in material (34%)
- Requests for personal details to secure the opportunity (34%)
- Investigative or research skills (39%)
- Being contacted out of the blue (33%)
- Being pressured to invest before the ‘offer’ ends (26%)
The FCA is calling on people to be ScamSmart and check its Warning List before making any investment decisions. This is important because, while the Financial Ombudsman Service (FoS) and Financial Services Compensation Scheme (FSCS) can provide financial recompense should things go wrong, they do not cover unauthorised firms and investments.
Standing up for victims of investment fraud
At KP Law, our Investment Fraud & Mis-Selling team helps victims of investment scams get their money back.
Providing a cool head in a crisis, we remove the burden from your shoulders as we fight for justice. What’s more, because we offer no-win, no-fee funding arrangements, you will benefit from expert legal support and complete peace of mind without having to worry about costs.
Crucially, because we know what to look for when investigating a case, we can often substantially increase a claim’s value. Our solicitors have even won cases where victims had been told that there was little to no chance of compensation.
Investigating and pursuing claims in the UK and beyond, if you have lost money due to fraudulent or negligent investment advice, contact us in confidence to find out how we can help.
