What is it?
You’re convinced to move your money into a fictitious fund or to pay for what later turns out to be a fake investment.
You may be targeted by cold callers or presented with fake investment opportunities promoted on search engines and social media sometimes pressuring you to act quickly but also in many cases asking you to leave your details in order for a call back to be arranged. Some may seem genuine because of the use of celebrity endorsements or testimonies from people who’ve allegedly received large profits but in reality, these are fake.
Criminals often set up cloned websites purporting to be legitimate investment firms and may even send out paperwork with official branding to add a layer of credibility to their scams. You may also receive an initial payment or even a couple of payments with “returns” on your investment to convince you to invest larger sums of money.
Criminals spend hours researching you for their scams and may provide you with details of previous investments and shares you hold.
These scams include convincing you to invest in markets such as gold, property, carbon, cryptocurrencies such as Bitcoin or even wine.
Criminals may get in touch claiming to be financial advisers and ask you to download a screen sharing software so they can make investments on your behalf. By downloading the software they gain access to your financial information.
How to spot investment Fraud
- You see ads within your social media feeds, sometimes celebrity endorsed, offering high returns on investments
- You’re contacted out of the blue by phone, email or social media about an investment opportunity
- You may be offered a high return on your investment with apparently little or no risk
- You’re told the investment opportunity is exclusive to you
- For some types of investment, you’re pressurised into making a decision with no time for consideration
Examples of investment Fraud
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.
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.
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