Even experienced investors can fall victim to scammers. No matter how much experience and confidence you have with investments and finances, you could still be at risk.
How do I spot investment scams?
Investment scams are usually difficult to spot because they're designed to look like genuine investments. The scammers may have a professional looking website and documents.
However, there are some tell-tale signs that suggest an investment opportunity is likely to be a scam or risky:
- Companies contact you unexpectedly about an investment opportunity via cold calls, emails or follow up calls after sending out a promotional brochure
- They pressure you with a time-limited offer, e.g. offer a bonus or discount if you invest before a set date
- They downplay the risks to your money, e.g. they talk about how you will own the actual assets they may sell if the investment doesn’t work as expected, or use legal jargon to mislead you
- They promise you tempting returns that sound too good to be true, e.g. offer much better interest rates than those offered elsewhere
- They call you repeatedly and keep you on the phone a long time
- They say they’re only making the offer available to you or even ask you not to tell anyone else about the opportunity.
How can I avoid investment scams?
- Reject cold calls. If you’re called about an investment opportunity, the safest thing to do is just hang up.
- Check an investment opportunity using the Financial Conduct Authority (FCA) Warning List online tool.
- Check that the investment company is on the FCA Financial Services Register.
- Don’t feel pressurised or rushed into making a decision. Always seek advice before investing, ideally from an Independent Financial Adviser who is authorised by the FCA. The Money Advice Service website has useful information on choosing a financial adviser.
- Check the FCA's list of unauthorised firms and individuals.
- Be careful of companies that are based overseas as they may not be regulated.
If you’re not sure whether a scheme or investment offer is a scam, contact the Citizens Advice consumer helpline on 03454 04 05 06 for advice.
What do I do if I think I’ve been scammed?
If you’ve been scammed you should always report it. Don’t feel embarrassed or ashamed.
Report what has happened to the police. You should also report it to Action Fraud on 0300 123 2040, or use their online reporting tool. They also have a 24-hour web chat service.
Visit our section on Support for scam victims for a list of organisations who provide support and advice to scam victims.