Home Money Investment fraudsters have conned victims out of £2.6bn since 2020

Investment fraudsters have conned victims out of £2.6bn since 2020

by Elijah
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Costly mistake: Victims of investment fraud were defrauded of an average of €26,773
  • Scammers have been defrauding people of £13 million a day using investment fraud
  • In boiler room fraud, fraudsters sell investments in worthless companies



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Fraudsters have stolen more than £2.6 billion through investment fraud since the start of 2020, research has found.

According to the Pensions Management Institute, 98,525 people fell victim to investment fraud between 2020 and the end of last year, with as much as £13 million falling into the hands of scammers every week.

The PMI, which obtained the data through a Freedom of Information request to the City of London Police’s National Fraud Intelligence Bureau, said victims were defrauded of an average of £26,773.

In 2023 alone, 26,740 people were victims of investment fraud, the highest number in four years, losing £527 million.

Costly mistake: Victims of investment fraud were defrauded of an average of £26,773

Costly mistake: Victims of investment fraud were defrauded of an average of £26,773

Robert Wakefield, president of the Pensions Management Institute, said: ‘Our research shows that a shocking number of people are falling victim to investment fraud.

‘It is worrying that thousands of people lose millions of pounds every year to financial scams in Britain. The number and sophistication of investment scams is constantly increasing.”

‘By maintaining a healthy dose of skepticism and training yourself to recognize some common warning signs, you may be able to protect yourself and your loved ones from victims.

‘Increasing the amount of financial education in schools could also help raise awareness of the risks of investment fraud.’

What is ‘boiler room fraud’?

The most successful form of fraud, known as boiler room fraud, has seen victims lose out on more than £500 million over the past four years.

In boiler room fraud, scammers pose as stock brokers and call victims to encourage them to invest in stocks or bonds of worthless, non-existent or nearly bankrupt companies.

‘Boiler room’ refers to illegal offshore deal rooms often located in Spain, Switzerland or the US.

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Pyramid schemes and fraud recovery have also netted 12,323 and 9,844 victims each in the past four years, netting fraudsters £499 million and £163 million respectively.

Pyramid schemes use unsustainable cross-selling business models that lure investors with the promise of high returns. Early investors are paid with the investments of new recruits, who ultimately lose out when the system collapses.

Fraud recovery programs involve criminals posing as recovery agents. These fraudsters target fraud victims and claim that they can arrest the original fraudster for a fee.

Meanwhile, pension, timeshare and holiday club fraud have also netted millions of pounds from victims during the period.

A huge £1.4 billion was also lost by victims of ‘other’ investment fraud, which takes the form of a wide range of schemes offering some form of profit in return for investments.

According to the Ministry of the Interior, this fraud often takes place during investment seminars, where unregulated investment products are mis-sold to victims.

These scams have claimed 53,663 victims since 2020, according to the PMI.

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How do you recognize investment fraud?

Wakefield has the following advice on how to spot when you might be being lured into investment fraud.

“The cost of living crisis is fueling investment scams in particular, as more and more people are tempted to seek quick financial returns to pay the bills,” he said.

‘Fraudsters will often lure people into scams with offers of quick financial gains or returns that are too good to be true.

‘Many scammers use sophisticated tactics to deceive their victims, and many people are simply unaware of the different types of scams.

‘Some common scams include fraudsters cloning the websites of legitimate companies or using social media to target people with fake investment opportunities, often posing as celebrities.

“A lack of awareness about evolving scams, such as those involving cryptocurrencies, could also make people more vulnerable.”

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