Investment scams and fraud

Even experienced investors can fall victim to scammers. Find out what to look out for and how to avoid being scammed.

How do I spot investment scams and fraud?

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

However, there are 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, or use legal jargon to mislead you.
• 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 offer you legitimate products that seem overvalued, e.g. shares that exist but have little or no resale value.

Be careful of investing in cryptocurrency or foreign exchange trading. Most cryptocurrencies aren't regulated by the Financial Conduct Authority, so they aren't protected by the UK's Financial Compensation Scheme.

How can I protect myself from investment scams and fraud?

It can be hard to figure out if an investment opportunity is legitimate or not, but there are some things you can do to help you avoid investment scams and fraud:

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

What should I do if I think I've been scammed?

If you’ve been scammed you should always report it, don’t feel embarrassed or ashamed.

• Action Fraud: Contact Action fraud to report a scam, or get more advice of scams and fraud.
• Financial Conduct Authority: Visit their website to check whether a company is authorised.
• Advertising Standards Authority: Report an online scam advert using their website.

There are also organisations that can help you understand more about investment scams and fraud:

• Financial Conduct Authority ScamSmart: Keep up to date with the latest investment scams and fraud.
• MoneyHelper: Visit their website to learn more about choosing a financial adviser.

Find out more about what support is available if you've been scammed