Citizens Advice estimates that nine million Brits have fallen victim to a financial scam over the past year.
The charity says that around one in five people across the UK have been caught out by a finance scam – such as a fake pension - in the 12 months to August.
Citizens Advice said likely financial scams include fake debt advice being offered on social media, scammers posing as a “friend in need”, pension scams, and parking QR code scams in which stickers with bogus codes are placed over genuine ones at car parks.
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One man, who contacted Citizens Advice after falling victim to a trading and cryptocurrency fraud, said he had “never experienced such disastrous financial trouble” as a result of being scammed.
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He had watched an online tutorial video about a legitimate trading system, but alongside it was an advert leading to a fake platform run by scammers, the charity said.
The man said: “After I started putting money into the ‘trading system’, I immediately got aggressive phone calls several times a day, saying: ‘You’ve got to keep trading or you’ll lose everything.’ Any requests to withdraw my money were ignored.”
“It’s a very unpleasant, stressful, intensive and coercive experience. I was frantic, traumatised and couldn’t face telling my family how much I’d lost.”
Dame Clare Moriarty, chief executive of Citizens Advice, said: “Anyone can fall victim to a scam and we know scammers aren’t only targeting those looking to invest money, but also those simply going about their day-to-day lives. It’s important for us all to be on our guard – if you’re not sure about something, take your time and get advice.”
How to spot an investment scam
Citizens Advice said investment scams are one of the most common types of fraud, with data from the UK financial regulator’s consumer helpline data showing that investors have saved £2 million by identifying when investment opportunities are fake.
While it is not easy to spot investment scams, especially when you are shopping around for the real deal, here are a few ways you can catch any fishy behaviour and protect yourself. Remember, there is no such thing as being too careful.
Too good to be true
The most common trick in the scammers’ playbook is to get their potential victims to start small and invest tiny amounts of money but with high rewards. This convinces the person being targeted that it is legitimate, and over time, small amounts become larger and then all of a sudden, a huge sum is lost to these frauds. So if an offer seems too good to be true, it most likely is.
Do not believe everything you see online
Social media thrives on a sense of impulse and urgency, be it TikTok videos or Instagram stories. Scammers use this to their advantage to trick people into making investments that can often turn against them. It is important to think twice and speak to your trusted friends and family members before you commit to any such investments.
Do your research
If you want to check whether an investment opportunity is genuine, look at the details. Is the grammar correct? Does it have any weird spelling errors? Can you find a photo or profile of the person you are speaking to online and do they actually exist? Go a step further and check if the person or organisation you’re speaking to is FCA authorised through the Financial Services Register or the FCA’s ScamSmart Investment Checker. This way, you’ll be able to weigh the risks of any potential investment opportunity you’re considering.
How to report an investment scam
If you become a victim of a scam or suspect you’re being targeted, you can report it to Action Fraud or call them on 0300 123 2040 anytime between Monday to Friday 8am and 8pm.
Tell your bank immediately using the Stop Scams UK website or by dialling 159. You can call them directly, or in case of risk or threat, be sure to dial 999.
