With financial and investment fraud categorised as a “national security threat” by banking industry body UK Finance, some UK banks are emailing customers to warn them about the risk, and to provide tips on how to protect against investment fraud and scams.
How big is the threat?
According to UK Finance’s 2021 half year fraud update, criminals stole a total of £753.9 million through fraud in the first half of last year. That’s an increase of over 30% year-on-year.
However, in the same period, losses incurred because of investment scams rose by 95% compared to 2020 (almost doubling from £55.2 million to £107.7 million). And only £44.3 million of this was returned to the customer.
What is Investment Fraud?
Investment scammers con victims into investing in fictitious funds or schemes. They tend to promise high levels of return to convince people to hand over their cash.
Common investment scams include cryptocurrency, gold, movies, property, and wine. Fraudulent cryptocurrency investments advertised on social media are a particular and growing concern. According to UK Finance “the lack of regulation around social media accounts means this type of fraud is increasingly prevalent and hard to prevent”.
What are the banks saying about investment fraud & scams?
Several UK banks have warned customers about scam investments. For example:
Barclays recently issued an urgent scam warning, with advice on what to look out for. According to the bank “Investment scams often account for the highest average value type of scam, which is why they’re such enticing options for fraudsters – with £15,788 lost on average to these types of scams in the last quarter.”
Santander emailed customers warning that criminals are using increasingly sophisticated ways to trick people. It said: “Exploiting new opportunities such as social media adverts with fake endorsements or influencers, WhatsApp, TikTok and cloned webpages. They’ll offer a better opportunity for your savings pot; low risk with high returns. To make sure you’re really convinced, they may even show their own successes as part of their sales pitch, but the investment opportunity may be significantly exaggerated, or even non-existent”.
HSBC warned people to watch out for investment scams as over £18 million was taken from its customers by fraudsters posing as legitimate providers in 2020. According to the bank, customers who were tricked into transferring money to investment scammers lost £19,728 on average.
The Financial Conduct Authority (FCA) has launched an online tool, ScamSmart, to help consumers identify if a potential or current investment is a scam or not. Find out more here.
Investment fraud compensation
At KP Law, we help people affected by investment fraud get their money back. We are also working with the Investment Fraud All-Party Parliamentary Group (APPG) to ensure that victims of investment fraud are better protected.
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 benefit from expert legal support and complete peace of mind without having to worry about costs.
Our solicitors have even won cases where victims had been told that there was little to no chance of compensation.
Contact us in confidence to find out how we can help.
