‘Get rich quick’ investment opportunities are soaring amongst young professionals, with more than £890 million lost to investment fraud last year.
Criminals are evolving the way that they target people with bogus investment opportunities, with many victims now being targeted on social media.
The total amount lost to investment fraud in the 2021/22 financial year rose by a staggering 49.5 per cent on the previous period (£890,916,169 up from £596,053,731). New data from the National Fraud Intelligence Bureau (NFIB) also shows there were 26,170 reports of investment fraud to Action Fraud in the same period, meaning victims lost an average of £34,043.41 each.*
Detective Chief Inspector Suzanne Ferris from the City of London Police, which is the national lead force for fraud, said:
“Investment fraud is rife and it destroys individuals and families. With the cost of living crisis now at the forefront of everyone’s minds, there is the potential that more people will fall victim to this devastating type of fraud as they try to find a way to get quick financial returns to help pay the bills.
“While criminals are now using social media to target people with fake investment opportunities, the ‘typical’ cold calling tactics haven’t gone away, so we must not be complacent and remain alert to these types of approach.
“Always be on your guard and take time to do your research thoroughly before deciding to invest any amount of money. If it sounds too good to be true, it probably is. Follow the Take Five to Stop Fraud advice as it will help protect you and your money.”
Data shows that reported cases of investment fraud have risen by 15.2 per cent in the last financial year compared with the previous period (22,719 reports), and young professionals are now the most likely victims of this type of fraud.
A total of 39 per cent of all victims of investment fraud were between the ages of 20 to 39 years old, with those aged 40 to 49 years old the third highest age demographic (16 per cent).
In many cases, victims have seen an influencer advertise an investment scam on social media. The suspects behind the fraud use influencers with a high number of followers to endorse their advert and reach a larger audience quickly and cheaply.
Upon seeing the advert, victims either make authorised push payments on fake or cloned websites, or their personal and banking credentials are obtained by criminals through social engineering techniques, such as remote access tools or over the phone.
Along with an increase in the number of victims lured into false investments via social media, investments into cryptocurrency have also increased over the last two years, with Bitcoin the most reported currency.
How to spot the signs and protect yourself
Before deciding to invest, always do your research and do not let anyone rush you. Only criminals will put pressure on you to make a quick decision. Stop, take time to think and consult trusted friends and family members before parting with your money.
Be cautious if you are asked to change money into cryptocurrency to invest or make a payment via cryptocurrency. This is often a tactic used by fraudsters.
Be aware that some investment opportunity approaches can come via social media. Always undertake additional research to check the validity of such an opportunity.
Fraudsters have been known to hack social media accounts to promote bogus investments. If you are making an investment based on a recommendation from a friend or family member sent via social media, check that this has actually been sent by them.
Scammers will often create professional looking websites and utilise fake business premise locations to give an impression of legitimacy.
Never let anyone take control of your phone or computer for any reason. A reputable business would never do this.
Check on the FCA website to see if an investment business is authorised by the Financial Conduct Authority.
The City of London Police, National Fraud Intelligence Bureau (NFIB) and Action Fraud always urge people to follow the Take Five to Stop Fraud advice:
STOP: Taking a moment to stop and think before parting with your money or information could keep you safe.
CHALLENGE: Could it be fake? It’s ok to reject, refuse or ignore any requests. Only criminals will try to rush or panic you.
PROTECT: Contact your bank immediately if you think you’ve fallen for a scam and report it to Action Fraud.
If you think you’ve been a victim of fraud, contact your bank immediately and report it to Action Fraud online at actionfraud.police.uk or by calling 0300 123 2040, or call Police Scotland on 101.
The City of London Police is leading a two week-long national campaign (17 – 25 October 2022) aimed at raising awareness of the signs of investment fraud to help prevent people from falling victim.