UK investment scams cost victims £20,000

Added 1st July 2016

Victim of investment scams lose an average of £20,000 ($26,780, €24,115), according to UK consumer champion Citizens Advice.

UK investment scams cost victims £20,000

Between January and March, a total of 5,000 scams were reported to Citizens Advice, with people losing an average of £2,500 across all types of scams.

While less prevalent, investment scams were by far the most costly.

Real investment scams reported to Citizens Advice include:

Precious metals and gems - people received cold calls with opportunities to invest in diamonds and gold, which either didn’t exist or were not the product they had been offered. One man paid £150,000 for diamonds which, although genuine, turned out to be worth a fraction of the cost.

Fine wine – investors were persuaded to buy vintage wines with promises that their value would increase over time. One person invested £500 after being offered a steep increase and cash back from the trader. The money never arrived, and when they tried to cancel they were unable to contact the trader.

Stocks and shares, bonds and Isas - people were contacted by scammers offering to trade on their behalf or to sell their current investments at inflated prices. One individual invested £65,000 with a share trader who offered them 3% dividends every month. They contacted Citizens Advice after the trader made excuses not to give the money back.

Pensions - people were contacted out of the blue with offers of free “advice” on how to increase their investment.  Previous research from Citizen Advice shows that as many as 10.9 million people received unsolicited contact about their pension in the last year, with scammers offering free advice as a step towards tricking them out of their pension.

A recent survey from Old Mutual Wealth found that 12% of those aged 50+ had been contacted about a free review, unlocking or liberating their pensions. 

Devastating impact

Gillian Guy, chief executive of Citizens Advice, said: “Scams can devastate people’s finances and leave them empty handed. Fraudsters vary their tactics to target different people, from pushing cut-price offers to those on a budget, to high-interest investments for those looking to grow their savings."

Leon Livermore, chief executive of the Chartered Trading Standards Institute, said: “Anyone can fall victim to a scam and while the criminals’ methods are becoming increasingly more sophisticated the advice remains the same, if it looks too good to be true, it probably is.”

Common scams

The release of the figures coincides with the launch of Scams Awareness Month – a national campaign to help people avoid falling prey to fraud.

The most common types of scams include:

Investment - victims are persuaded to invest money into fake ventures and are then unable to get their money back.

Fake services - people are offered a service for a fee, only to find the service isn’t real or doesn’t exist at all. Examples include, offers to fix computers remotely and fake invoices for advertising.

“Vishing” – when con artists contact people by phone or other voice media pretending to be a legitimate company, asking for credit or debit card details.

Doorstep selling - victims are offered goods door-to-door or from the back of a van, which are likely to be counterfeit. Fraudsters selling mattresses, “fresh” fish and cleaning products were all reported to Citizens Advice.

Upfront payment or fee - fraudsters ask for a payment in advance for a service or product that never materialises, such as asking for a fee to get a loan, or to pay for a training course to secure a job.

Premium rate texts - victims inadvertently agree to receive premium rate texts about games or competitions, usually costing around £4 each.

Counterfeit goods - people buy goods at marketplaces or online that turn out to be counterfeit or even stolen. Common products include cigarettes, shoes and clothing, and tickets for events.

Goods not received - people place orders for goods which don’t arrive. Scams are often carried out through social media and online auction sites.

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About Author

Kirsten Hastings

Senior Reporter

Kirsten is a senior reporter for International Adviser, covering global news stories about the financial services industry. She joined Last Word Media in October 2015 after two years working as a reporter covering the staffing and recruitment industry. Kirsten has a Masters in Financial Journalism from the University of Stirling. 

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