What is iNVESTMENt FRAUD?
Criminals create fake investment opportunities to convince you to put your money into investments that don’t exist. You could be contacted by phone, email, social media message or WhatsApp. You might also see adverts on search engines and social media.
Criminals might:
- Set up cloned websites pretending to be legitimate investment firms.
- Send you paperwork with official branding to add a layer of credibility to their scams.
- Send you initial payments to show “returns” on your investment, to convince you to invest larger sums of money.
- Use fake celebrity endorsements or fake testimonies from people who’ve allegedly received large profits.
- Provide you with details of your own previous or current investments to seem legitimate – they can spend hours researching you for a scam.
- Claim to be financial advisers and ask you to download screen-sharing software so they can make investments on your behalf – by downloading the software they gain access to your financial information.
Fake investment opportunities might include: shares and funds, cryptocurrency, gold, property, carbon, or high-end goods such as wine or art.
pROTECT YOURSELF FROM INVESTMENT FRAUD
- Avoid clicking on ads within your social media feeds
- Be cautious of celebrity endorsed investment ads or those offering very high returns on investments.
- If you’re contacted out of the blue by phone, email or social media about an investment opportunity, do your research on the company first before you part with any personal or financial information.
- If you’re offered a high return on your investment with apparently little or no risk and is also exclusive to you, this is a huge red flag.
- For some types of investment, criminals may pressure you into making a decision with no time for consideration. Only criminals will try to rush or panic you. You can say no and take your time to work out if it’s legitimate or not.
Examples of investment Fraud
Investments prospects
Dave* was due to retire in five years and noticed that he wasn’t getting a great a return on his current investments. He worried that he wouldn’t have enough money to retire on comfortably, so he decided to go online and see what deals he could find that might give him a bigger return. Dave typed ‘invest my money’ into the search engine and got lots of results. He decided to look at the first one that came up and saw a great return on a site which looked professional and detailed. He filled in his details on the contact form and waited for someone to get back to him. Within a couple of days, Dave got a call from a very friendly lady who talked him through the details and sent him lots of information by email. He decided to invest a small sum of money. A couple of months later, Dave looked at his account via the portal that he’d signed up to online and to his delight he’d doubled his money! Dave decided to invest a far larger sum of money this time. After six months, Dave wanted to cash out on his investment, so he contacted the firm in order to start the process. He didn’t get a response. He later tried to login to his account on the portal only to find that he could not. He tried desperately on numerous occasions to contact the firm and then one day the website could no longer be found. Dave had lost his life savings to a criminal.
Cryptocurrency
Arun* saw a ‘celebrity endorsed’ social media post advertising the promise of big returns on Bitcoin. He contacted the company and following a phone call with a “trader’ was convinced to make a payment of £300. After logging into his trading account on the website, he saw his investment increase. Arun continued to invest more money following pressure from another “trader” from the company and was persuaded to take out a loan sourced by the criminal. Arun only realised it was a scam when he was unable to access his account to withdraw his money or contact the company.
Bonds and Shares
Maisy* received a cold call from a ‘stockbroker’ at an investment firm, offering her shares in a company about to be listed on the major stock exchange. Maisy was told she would receive a huge return and was urged to invest before the company ‘goes public’. She was given the ‘firm registration number’ and addresses of individuals ‘authorised’ by a regulator convincing her it was legitimate.
Maisy proceeded to buy the shares. She realised she had been scammed when she was unable to contact the investment firm and couldn’t get her money back.
Online dating
Jack* met Beth on an online dating app where they began messaging regularly. Jack felt like he was getting to know Beth well and she explained she was a successful investor with detailed knowledge of cryptocurrency.
Beth told Jack more and more about cryptocurrency and the huge profits there were to be made by investing. Although he was hesitant at first Beth persuaded Jack to invest, telling him that she had made a large sums on a number of different cryptocurrencies. Beth told Jack to visit an online trading platform and showed him how to get started. Over the next few weeks Jack invested more and more of his savings. However, soon after he had moved all of his savings to the online trading platform he noticed his balance had been reduced to zero.
He tried to contact Beth repeatedly to no avail. It was then that Jack realised he had fallen for a fraud.
*These case studies are based on insights from partners
