There are many different types of investment fraud. They usually involve criminals contacting people out of the blue and convincing them to invest in schemes or products that are worthless or do not exist. Once the criminals have received payment, they cease contact with the victim.
The majority of investment frauds are run out of offices known as boiler rooms.
How to protect yourself from Financial Investment fraud:
Investment opportunities: Don’t be rushed into making an investment. Remember, legitimate organisations will never pressure you into investing on the spot.
Seek advice first: Before making significant financial decisions, speak with trusted friends or family members, or seek professional independent advice.
FCA register: Use the Financial Conduct Authority’s (FCA) register to check if the company is regulated by the FCA. If you deal with a firm (or individual) that isn’t regulated, you may not be covered by the Financial Ombudsman Service (FOS) if things go wrong and you lose your money.
The ads then link to professional-looking fraudulent websites. Victims are then persuaded to invest with the fraudster firm using cryptocurrencies or traditional currencies.
The firms operating the fraud are usually based outside the UK but will claim to have a UK presence, often a prestigious City of London address.
Fraudulent firms can manipulate software to distort prices and investment returns, so victims are made to believe they are seeing real graphs and images of the cryptoasset market, but these are FAKE.
Fraudsters also manipulate victims into buying non-existent cryptoassets.
Fraudsters are also known to suddenly close victims online accounts and refuse to transfer the funds to them or ask for more money before the funds can be transferred.
How to protect yourself
If something sounds too good to be true, it probably is.
Be wary of adverts online and on social media promising high returns on investments in cryptoasset or cryptoasset-related products
Be suspicious if you are contacted out the blue about an investment opportunity. This could be via a cold call, an e-mail or an approach on social media.
Don’t be rushed into making an investment. No legitimate person or firm will pressure you into making an investment or committing to something on the spot. Take time to do your research:
Check with Companies House to see if the firm is registered as a UK company and for directors’ names.
To see if others have posted any concerns, search online for the firm’s name, directors’ names and the product you are considering.
Seek advice from trusted friends, family members or independent professional advice services before making a significant financial decision. Even genuine investment opportunities can be high risk.
Most firms advertising and selling investments in cryptoassets are not authorised by the Financial Conduct Authority (FCA). This means that if you invest in certain cryptoassets you will not have access to the Financial Ombudsman Service or the Financial Services Compensation Scheme if things go wrong – so always check the FCA Register to make sure you’re dealing with an authorised firm and check the FCA Warning List of firms to avoid.
Use a financial advisor accredited by the Financial Conduct Authority. Paying for professional advice may seem like an unnecessary expense, but it will help prevent you from being scammed. Only use the telephone number and email address on the FCA Register, not the contact details the firm gives you and look out for subtle differences.
FURTHER FRAUD PREVENTION ADVICE
Action Fraud also advises that the public follow the advice of the Take Five to Stop Fraud campaign to keep themselves safe from fraud.
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 okay to reject, refuse or ignore any requests. Only criminals will try to rush or panic you.
Protect: 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.
