Fraud involving shares, bonds, Forex and cryptos tops investment scams list in 2018, FCA data show

Maria Nikolova

FCA contact centre data show that out of 5,884 investment scams reports last year, 4,996 involved share and bond scams, forex and cryptocurrencies.

The UK Financial Conduct Authority (FCA) has earlier today posted some gloomy data about investment scams. Data from Action Fraud reveals over £197 million of reported losses in 2018, with victims scammed out of over £29,000 on average last year.

According to data from the FCA call centre, the most commonly reported scams involved investments in shares and bonds, Forex and cryptocurrencies by firms that are not authorised by the FCA. Together they accounted for 85% of all suspected investment scams reported in 2018.

These numbers are in line with earlier statistics published by Action Fraud back in August 2018, which showed that, between June 1, 2018 and July 31, 2018, a total of 203 reports of fraud involving cryptocurrency were filed with Action Fraud. The total reported loss was £2,059,501.29. In some cases, victims have realised that they have been defrauded, but only after the website has been deactivated and the suspects can no longer be contacted.

In its warning published today, the FCA notes the profile of investment scams is changing, with an increasing number of people targeted online shifting away from the traditional cold call. Fraudsters are now contacting people through emails, professional looking websites and social media channels, such as Facebook and Instagram. Last year 54% of those who checked the FCA Warning List had been contacted by potential fraudsters via online sources, up from 45% in 2017.

The UK regulator is urging people to be vigilant when making investment decisions, and to look out for warning signs, such as promises of unrealistic returns and flattery by sales people to get people to make a deposit.

Investment scams include a psychological component which often prevents people from reporting they have been victims of a fraudulent scheme. Let’s recall that, back in October 2017, the FCA asked the public not to stay silent about investment scams.

That plea came as research conducted by YouGov showed 22% of over 55s surveyed who suspect they have been contacted about a fraudulent investment in the last three years, did not report about it. The most common reason cited for not reporting was not knowing who to report to (49%).

Although 63% say they would report a suspected investment scam to an organisation, this percentage is significantly lower than that of those who would report spilled liquids in a supermarket (84%) or fly tipping in their local area (81%).

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