The Financial Conduct Authority have urged over 55s to make themselves aware of investment scam tactics, after it was found that only two in five knew how to spot a fraudulent investment opportunity.
The new research, commissioned as part of the FCA’s ScamSmart campaign, found that victims of investment fraud lost on average £32,000 last year, often through pressuring people to make a quick decision on a time-sensitive offer.
A third of over 55s surveyed said they thought it best not to discuss investment decisions with others, and less than half said they would consider seeking impartial advice before making an investment.
The FCA strove to highlight the ploys used by investment scammers, which often include offering lucrative returns above the market rate and downplaying the risks of the investment.
Other methods include saying that the deal is only available to the target and asking them to keep it a secret, as well as putting them under pressure to invest in a time-limited offer.
On the back of the research, the FCA have urged consumers to be sceptical and cautious before they investing their money, warning that if money is invested with an unauthorised firm then they will have no protection from the Financial Ombudsman Service or Financial Services Compensation Scheme if the scheme turns out to be a a scam.
Mark Steward, Director of Enforcement, FCA, commented:
“Be alert to the warning signs like being contacted out of the blue, promises of low risk and/or guaranteed above market returns, special deals just for you, time pressure and, very often, flattery.
“Be vigilant. Don’t let them push you into making a decision and parting with your money. Question their claims. Check the FCA Register and seek impartial advice. If in any doubt – don’t invest.”