Fraudsters are always out there and constantly changing their tactics. Here are some of the red flags that could help you spot a variety of investment scams
- Be vigilant - if a phone call or voicemail, email or text message asks you to make a payment, log in to an online account or offers you a deal that sounds too good to be true, be extremely cautious
- If you get a call from someone who claims to be from your bank or financial services provider, don't give away any personal details unless you are satisfied they are who they claim to be
- Fraudsters often use very convincing tactics to get you to sign up. Beware of anyone trying to pressurise you into making a decision
- Fraudsters will make an investment sound very appealing and will often suggest that it’s less risky than it is
- Fraudsters are persistent and will often try to form a relationship with you in an effort to build your trust. Beware of anyone who calls you repeatedly and/or anyone who tries to keep you on the phone for long periods of time
- You might be told that you’re receiving a very special and/or limited offer
- You might be told not to tell anyone about the offer you’ve been given
- Fraudsters are known to target previous victims of investment fraud, claiming that they can recover lost money. You might be asked to pay an upfront fee but these companies will not get back your money
- Some companies that run scams base themselves overseas to avoid regulatory requirements. Be cautious if a company that’s based overseas contacts you with investment opportunities
Some investment scams to be aware of
Pension scams involve fraudsters who target someones retirement savings with false investment opportunities or early release schemes. They use persuasive tactics to convince someone to transfer their pension funds into fraudulent schemes, often resulting in significant financial losses.
Steps to avoid falling victim to a pension scam
- Be sceptical of unsolicited offers: Treat unexpected contact about your pension with caution
- Verify credentials: Ensure the person or company is registered with relevant financial authorities
- Research: Check for reviews and any negative reports about the company
- Avoid time pressure: Don’t rush into decisions; fraudsters often create a false sense of urgency
- Seek independent advice: Speak with your financial adviser before making changes. If you don't already have one, you can find one through unbiased.co.uk
- Be cautious of high returns: If an offer sounds too good to be true, it likely is
- Understand tax implications: Early pension release can have significant tax penalties and may be illegal
- Protect personal information: Don’t share your pension details with unknown contacts
- Educate and report: Keep informed about scams, share knowledge with friends and family, and report suspicious activity to authorities
Fraudsters are contacting victims of previous scams pretending to be a firm or a well-known organisation that can recover money that has already been lost. They ask for a fee to help them fund the activity.
Steps to avoid falling victim to a recovery firm scam
- Be sceptical of unsolicited offers: Treat unexpected contact with caution
- Research the firm: Check online reviews and complaints
- Verify credentials: Ensure the firm is registered with relevant authorities
- Avoid upfront fees: Be wary of firms demanding fees before providing service
- Doubt guarantees: Be cautious of promises of 100% recovery
- Seek independent advice: Consult with a trusted financial advisor or lawyer. If you don't already have a financial adviser, you can find one through unbiased.co.uk
- Protect personal information: Do not share sensitive details without verifying the firm
- Educate and report: Keep informed about scams, share knowledge with friends and family, and report suspicious activity to authorities
Romance scams involve a fraudster creating a fake online identity to establish a romantic relationship with someone. After gaining trust, the fraudster makes up stories to gain money or personal information, often using manipulative tactics to exploit someones emotions.
These scams commonly occur through dating websites or social media platforms.
Steps to avoid falling victim to a romance scam
- Be sceptical: Beware of unsolicited contacts on dating sites or social media
- Research: Carrying out reverse image searches, attemt to verify stories and check for inconsistencies
- Spot red flags: Quick declarations of love, refusal to meet or video chat, and requests for money are major warnings
- Never send money: Avoid sending money or personal information, regardless of the situation
- Protect personal information: Be cautious with sharing details like your address or financial information
- Educate and report: Keep informed about scams, share knowledge with friends and family, and report suspicious activity to authorities
The MoneyHelper website is a useful resource for information on a range of different types of scams.
Protecting yourself from investment scams
- Talk with trusted friends and family about any investment offer you’ve been given as this could help you spot a scam
- Look out for clones of actual companies - they’re fake companies made to look genuine. Use the contact details you’ll find on the FCA’s Financial Services Register to get in touch with a company – not the contact details given to you
- Reject any unsolicited or ‘cold’ calls that you receive and don’t give out any personal or financial information until you’re sure you’re dealing with a reputable company
- Find out more about cold calls and investment scams on the Financial Conduct Authority website
As part of M&G plc we can also share with you the contact details for their fraud team. If you need to speak with someone you can trust you can contact them by email or phone on 0207 004 8888, Monday to Friday 9am to 5pm.
Additional support
ActionFraud
For information on fraud and cyber-crime visit ActionFraud, the UK’s national fraud and cyber-crime reporting centre
ScamSmart
The Financial Conduct Authority has produced useful information to help you spot potential scams
MoneyHelper's Guide to Scams
More impartial guidance backed by government and Money & Pension Service