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Thousands of people fall prey to investment scams every year in the UK – and people over the age of 55 are more likely to be targeted.
More than £612m was lost to investment fraud in the UK in 2023, according to the City of London Police, which received 30,130 reports of scams. The average loss per victim was significant – around £25,000, while one victim lost a huge £11.9m.
While scammers might be getting smarter, forewarned is forearmed and there are plenty of tell-tale signs everyone should know to avoid getting stung.
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The data also shows that the most affected were those aged 55 to 64, who lost more than £133m to investment fraudsters. As the victim’s age increases, so too does the average loss.
Martyn James, a consumer rights expert who works on BBC’s Rip Off Britain, says older people are targeted because they are more likely to have disposable income, and to be home to answer the phone when the scammers call.
“Fraudsters play on popular fears – inheritance tax, social care planning, depleting retirement funds – to get older people lured in,” James says.
“They often go back for a ‘second hit’ too – offering fake schemes to recoup stolen money, operated by the same scammers or ones to whom a list of ‘easy marks’ has been sold on,” he adds.
Criminals who engage in investment scams contact people out of the blue and convince them to invest in schemes or products that are worthless or do not exist. Victims are convinced by promises of huge returns on investment, way above realistic levels.
Some of the most common areas for scams are supposed investment opportunities in
Louise Cockburn, security awareness and culture manager at wealth manager Quilter, says technology is helping make scams more and more convincing, “enabling scammers to quickly access vast amounts of personal data, create realistic emails and websites, and find potential targets”.
She adds: “Scammers will often try to evoke heightened states of emotion – excitement, fear of missing out, urgency, panic – as they know that these states often promote faster, less thought-out responses and actions.”
“Take a breath, slow down and don’t feel pressured into making a quick decision,” she suggests.
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People can fight back by being aware of and vigilant against scammers’ common tactics. Cockburn says there are nine red flags that a potential investment opportunity might be a scam. Not every scam will have all of these, but every scam is likely to have at least one.
Oliver Little, temporary detective superintendent at the City of London Police, said: “Investment fraud destroys lives and is of particular concern to the older demographic of the UK public.
“If you are contacted out of the blue and asked if you would like to invest money, even if you meet someone face-to-face or at an office location, do not be rushed into handing over any money. Always seek the advice of friends, family and/or a financial adviser if you are wanting to invest any form of savings. Stop. Think fraud.”
Investment scams can fall into the category of Authorised Push Payment (APP) fraud – this means that a scammer tricks their victim into sending funds by bank transfer (either Faster Payments or CHAPS) into an account the scammer controls. This includes if you make a transfer from your bank account into a fraudulent investment opportunity. These payments are referred to as ‘authorised’ because the victim ‘voluntarily’ sends the money, not realising that they are being scammed.
In October 2024, new APP fraud reimbursement rules came into effect. This means any victim of a UK-based APP fraud committed since then may be able to claim their money back from their bank, so long as they weren’t ‘grossly negligent’ (this caveat does not apply to people classed as “vulnerable” – which might be someone with dementia, for example).
So if you’ve been scammed you should certainly report it quickly, as you might be able to get your money back. But bear in mind that this won’t apply to payments outside the UK, or to amounts over £85,000.
If you think you have been scammed, the first thing to do is to protect yourself as much as possible. Immediately contact your bank or credit card company. Provide as much information as possible, including who you paid and why you think it was a scam. Put a block on accounts to prevent further withdrawals. See if you can make a claim to get your losses back from your bank.
Victims of APP fraud must also report the loss to police or allow their bank to do this on their behalf. They must report the scam no more than 13 months after the last relevant fraudulent payment was authorised.
The Payment Systems Regulator, which brought in the rules, says it expects the vast majority of APP fraud victims to be reimbursed.
If you’re unhappy with the way your bank handles your claim, you can take the matter to the Financial Ombudsman Service for consideration. The Ombudsman can award reimbursement of up to £430,000.
Be aware that you could be targeted again. Fraudsters sometimes get back in touch with victims claiming they can help them recover lost money. Do not fall for this. Hang up: it’s just another scam.
If you have shared personal details with the scammers, you may become a victim of identity theft – where someone pretends they are you in order to take out loans or make purchases. Check your credit rating every few months using Equifax, Experian, or TransUnion, and follow up on any unexpected or suspicious results. Change your passwords too, including for your email, online banking and shopping websites.
Consider getting legal advice. In many cases of fraud there will have been civil wrongs, such as deceit and/or breach of contract – so you may have options to take legal action. Citizens Advice can also help you understand your options.
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