What’s investment fraud?
Investment fraud is when people are tricked into investing money in fake or misrepresented opportunities. They’re often promised high returns with little risk, but instead the invested money is stolen.
While there are many types of investment fraud, they generally involve criminals contacting people out of the blue and convincing them to invest in something that’s worthless or non-existent. Once the criminals have received the payment, they disappear, never to be heard from again.
Most investment frauds are run out of offices known as boiler rooms.
International investment scams can be especially dangerous as the Mandatory Reimbursement regulation only applies to UK bank transfers – not to international payments. This means if your international payment turns out to be a scam, you won’t receive a refund.
Protect yourself from investment fraud
Stop and think
Don’t be rushed into investing. Remember, legitimate companies will never pressure you into a decision.
Get advice
Seek professional independent advice, or chat to friends or family before making significant financial decisions.
Check the FCA register
Search for the company on the Financial Conduct Authority’s (FCA) register Opens an overlay [Will show a security message first] to make sure they’re regulated. If you deal with a company or person that isn’t regulated, you may not be covered by the Financial Ombudsman Service (FOS) if things go wrong.
Visit the FCA’s Invest Smart Opens an overlay [Will show a security message first] for more information on how to invest safely.
What to do if you’ve been a victim of investment fraud
Be aware as you could be targeted again
Criminals sometimes get in touch with previous victims, claiming they can help them recover their lost money. This is just a secondary scam and you should end all contact immediately.
Keep an eye on your credit rating
If you suspect your identity may have been stolen, you should check your credit rating, which is quick and easy to do online. It’s a good idea to do this every few months anyway, to watch out for anything unexpected or suspicious.
Seek legal advice
In many fraud cases, there’s a fine line between what’s considered fraud and a breach of contract, for which there are civil litigation options. You should always seek professional legal advice or contact Citizens Advice Opens an overlay [Will show a security message first] to understand your options.
Report it to the FCA
You should report a scam or unauthorised company Opens an overlay [Will show a security message first] to the Financial Conduct Authority or contact their Consumer Helpline on 0800 111 6768.
You can get practical tips and advice around preventing email, phone and online fraud through the Take Five to Stop Fraud Opens an overlay [Will show a security message first] initiative.
You can also report fraud or cybercrime to Report Fraud Opens an overlay [Will show a security message first], a national reporting centre run by the City of London Police.