Warning over investment scams

Investment scam victims are losing £20,000 on average to frauds which may involve fake diamonds, bogus stocks and shares and fine wines that do not really exist, Citizens Advice is warning.

Friday, 1st July 2016, 3:00 pm
Updated Thursday, 25th August 2016, 8:47 pm
Pension scam

In one case seen by the advice charity, a man paid £150,000 for diamonds that turned out to be worth a fraction of the cost.

Analysis of 5,000 scams reported to the charity between January and March 2016 showed how fraudsters are conning savers and investors out of tens of thousands of pounds.

Citizens Advice warned that people are being duped by promises of strong returns by cold calls, online adverts and fake websites.

But the return on their investment fails to materialise and investors then find they are unable to contact the “trader.”

Pensioners are also being targeted, with offers of “free” advice on how to increase investments.

The pension freedoms launched in 2015 give the over-55s much greater choice over how they use their pension pots.

But this has also sparked fears that fraudsters will see these people’s savings pots as a particular target.

Citizens Advice and the Chartered Trading Standards Institute have launched Scams Awareness Month which urges people to take three steps to avoid being ripped of: get advice, report it and tell others about it.

Scammers use various tactics to trick people into parting with their cash, with people losing an average of £2,500 across all types of scam, Citizens Advice said.

Methods include vishing - whereby scammers cold-call people in a bid to get their bank details, and offers of fake services, such as telling people their computer has a virus that they can fix remotely.

While investment scams tend to be less common, they are by far the most costly, with an average loss of £20,000.

Gillian Guy, chief executive of Citizens Advice, said: “Scams can devastate people’s finances and leave them empty-handed.

“We’re warning people to be on their guard against opportunities that come of the blue and far exceed the deals you’d get elsewhere - they may well be a scam.”