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Posted 11th January 2017

Investment fraud: How to spot the scam signs

The pension freedoms mean you've got more choice than ever before on how to take your pension pots, or where to invest your money to help it grow. With low interest rates around offering poor returns on savings, you need to be scam smart to avoid being an attractive target for fraudsters.

The Financial Conduct Authority (FCA) received 2,142 reports of scams or unauthorised firms from June to November last year. With investment opportunities and scams often being very difficult to tell apart, the FCA are urging people to take their time when checking investment offers before going ahead.

New research by the FCA revealed a fifth of over 55’s, with above average incomes, suspect they were targeted by a fraudulent investment scam in the past three years. This increased to a third of those aged 75 and over.

32% over 75s and 22% of over 55's believe they have been targeted by investment scams in last three years
on average victims lost 32,000 pounds each to investment fraud last year

On average, victims of investment fraud lost £32,000 [1] each last year. However, despite the number of people potentially contacted by these scams, one in eight of over 55s who invested in financial products spent little or no time researching them before handing over money.

1 in 8 spend little or no time researching investment products before handing over money infographic

It's important to be aware that there are investment fraudsters out there, and in many cases, they have highly professional looking websites to entice victims and make them feel their service is genuine.

Interestingly, only 27% of people sought professional, impartial advice to help with their investment choices - a check that the FCA encourage consumers to do before investing.

How to avoid being a victim of investment fraud

In response to the recent research into investment scams, the FCA is urging people to start thinking about how they can look out for fraudsters. Here are some of the things you can do to keep your money safe:

  • Rejecting unsolicited investment offers
  • Checking the FCA Register to see if the firm or individual they are dealing with is authorised and checking the FCA Warning List of firms to avoid

Mark Steward, Director of Enforcement at the FCA, said:

‘’Making a significant financial investment is an important decision - be prudent, do your homework and be especially on guard if contacted out of the blue by someone you don’t know.

No investment decision should be rushed. Be sceptical. Be suspicious. Ask questions and get answers you can verify. And remember, if you receive an unsolicited call about an investment opportunity that sounds too good to be true then it probably is. The best thing to do is hang up.”

So look out for investment scams, you’ve worked hard for your pension savings so make sure to follow the simple steps to keep your money safe. For more on scams, take a read of our pensions explained section.

For more information on Investment scams and top tips from the FCA, take a look at their website.


  1. [1] Figures from Action Fraud released in October 2016
  2. All figures, unless otherwise stated, are from YouGov Plc. The total sample size was 1,004 GB adults aged 55+, in social grade ABC1, with a gross household income of £30,000+ and/ or savings of £5,000+. Fieldwork was undertaken between 3rd - 11th November 2016. The survey was carried out online.

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