Scammers often start by encouraging people to invest a small amount, paying out from other victims’ money to create the illusion of legitimacy
Barclays has revealed that victims of investment scams are losing an average of £14,000.
The bank’s data shows that last year, the average loss to this type of fraud was £14,313, with nearly half (48%) of reported investment scams involving younger adults aged 21 to 40. Scammers often start by encouraging people to invest a small amount, paying out from other victims’ money to create the illusion of legitimacy.
This tactic often leads to larger amounts being lost, Barclays warned. The bank has shared some tips to avoid falling victim to such scams. Their advice is be aware that social media can fuel impulsive decisions and scammers often create a false sense of urgency.
Barclays also advises you to take a moment to reflect before committing to any investments and if an offer seems too good to be true, it probably is. It’s always good to seek advice from a qualified financial adviser or a trusted family member. Don’t take investment recommendations from a friend without doing your own research.
Investors should also verify the person or organisation contacting you is authorised by the Financial Conduct Authority via the financial services register or the Financial Conduct Authority (FCA) ScamSmart investment checker. The FCA ScamSmart investment checker (https://www.fca.org.uk/scamsmart) also has a warning list showing the firms that the FCA are concerned are working without permission.
The FCA also offers advice on how to avoid being a victim of scams. It includes much of the advised offered by Barclays, but also warns people to look out for a number of other key indicators that the offer could be a scam. For instance is the offer exclusively for you? Scammers might claim that you’ve been specially chosen for an investment opportunity, and it should be kept a secret.
Are they trying to flatter you? Scammers often try to build a friendship with you to put you at ease. Are you feeling worried or excited? Fraudsters may try to influence your emotions to get you to act. Are they speaking with authority? Scammers might claim that they’re authorised and often appear knowledgeable about financial products.
