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Too good to be true? How to avoid losing your savings to investment scams.

January is a popular time of year for reviewing financial arrangements. As the cost of living increases, it is natural that people with money to invest will want to make sure that they are getting the best possible return from their savings.

But beware – scammers are out there wanting to take advantage of your anxiety by persuading you to part with your money through investment fraud scams – scams dressed up as investment opportunities.

Spotting a scam

Investment fraud and scams can be difficult to spot because they’re designed to look like genuine investments. The scammers may have professional-looking websites and documents.

However, research by Age UK has identified some tell-tale signs that suggest an investment opportunity is likely to be a scam:

  • Companies contact you unexpectedly about an investment opportunity via cold calls, emails or follow-up calls after sending out a promotional brochure.
  • They pressure you with a time-limited offer, e.g. offer a bonus or discount if you invest before a set date.
  • They downplay the risks to your money, e.g. they talk about how you’ll own the actual assets they may sell if the investment doesn’t work as expected.
  • They promise you tempting returns that sound too good to be true, e.g. offer much better interest rates than those offered elsewhere.
  • They call you repeatedly and keep you on the phone for a long time.
  • They say they’re only making the offer available to you or even ask you not to tell anyone else about the opportunity.
  • They use a lot of technical or legal jargon without trying to explain what it means.
  • Advertising through social media stories about how celebrities or influencers have made money from investments.

How to protect yourself

It can be hard to figure out if an investment opportunity is legitimate or not, but there are some suggestions from Age UK on what you can do to help you avoid investment scams:

  • Stay calm: If you get pushy calls offering you investments, don’t feel rushed or pressured to respond.
  • Don’t commit: Always seek advice before making decisions.
  • Stop the call: If you feel pressured or if the caller won’t take no for an answer, end the conversation. Don’t be embarrassed to put the phone down.
  • Think about foreign fraud: Be wary of dealing with companies based overseas. They could be located there to avoid important regulatory requirements.
  • Check adverts carefully: Don’t buy from newspaper adverts or marketing leaflets unless you’re sure they’re genuine. Celebrity endorsements can be easily faked, so can’t always be trusted.

Remember the golden rules:

Stop the conversation if you think that you are uncomfortable – a legitimate investment provider won’t mind if you want to take your time but a fraudster will keep pushing.

Listen to your doubts: If you think the offer sounds too good to be true, it probably is.

What to do if you are worried that you have become a victim

It is natural to feel ashamed or embarrassed when you realise that you have been a victim of a scam – but don’t worry that you will be stigmatised for being taken in. Your building society / bank wants to hear from you – you may be entitled to reimbursement of your losses and sharing your experiences can be turned into warnings to help other people not becoming scam victims.

  • As soon as you can, tell the building society / bank from which you transferred money to the scam what has happened – they will try and recover the funds paid out.
  • You can also report the scam to the police via ActionFraud online or by calling 0300 123 2040 – or ask your building society / bank to do that for you.