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Be ScamSmart to avoid becoming a victim of investment fraud
Chadney Bulgin has signed up to a national campaign to raise awareness about the techniques being used by criminals to defraud investors.
This follows news that more than 3,000 people lost an average of £32,000 each to investment fraud last year
According to ActionFraud, the UK’s national fraud and cyber-crime reporting centre that compiled the figures, one of the most common methods used by fraudsters is to pressurise potential investors to make a quick decision on a time-limited investment offer.
As part of the campaign, Chadney Bulgin has not only pledged to actively raise awareness of scams, but each member of its team of professional advisers will also commit 15 minutes per month to help identify and report potential scams.
“We are aware that fraudsters are particularly targeting those over 55 years old, as they believe they are more likely to have money to invest,” said David Thomas, Joint Managing Partner of Chadney Bulgin.
“We urge everyone to be alert to the warning signs, such as being contacted out of the blue, promises of low risk or guaranteed above market returns as well as special deals just for you and time pressure to complete.”
Worryingly, new research commissioned by the FCA reveals more than half (53%) of the over 55s surveyed believe acting quickly can be key to getting a good deal, demonstrating how many could be vulnerable to this tactic.
A third (34%) said it is best not to discuss investment decisions with others and fewer than half (48%) said they would be likely to seek impartial advice before making an investment.
These attitudes are seized on by fraudsters, who often urge their target to keep the offer a secret, in order to prevent others from dissuading them from investing.
The common tactics used by fraudsters include:
- Offering lucrative returns above the market rate and downplaying the risks of the investment
- Using flattery to make potential victims feel good, such as praising them for being a knowledgeable investor
- Saying that the deal is only available to the target and asking them to keep it a secret
- Saying that other clients have invested or want in on the deal (known as ‘social proof’)
- Putting them under pressure to invest in a time-limited offer
The FCA is also highlighting the fact that if someone invests their money with an unauthorised firm then they will have no protection from the Financial Ombudsman Service or Financial Services Compensation Scheme if things go wrong.
To avoid being a victim of investment fraud, the FCA advises consumers to, at the very least: