INVESTMENT SCAM POTENTIAL VICTIMS SUBJECT OF NEW CAMPAIGN

Financial Conduct Authority is to use money recovered from financial crime to try to end £1.2bn lost to investment fraud. Potential victims of investment scams are to be warned by a national campaign set up by the City watchdog to tell them about the increasingly sophisticated techniques used by fraudsters. The Financial Conduct Authority will for the first time use money recovered from the proceeds of financial crime to inform those, typically over 65, who collectively lose £1.2bn a year to investment fraud. The average investor loses around £20,000, said the watchdog, which also said it receives around 5,000 calls a year from investors about suspected investment fraud. While many of the emails and brochures sent out by fraudsters might seem obviously criminal to some householders, Martin Wheatley, the chief executive of the FCA said that these scams could dupe even experienced investors out of their savings. In fact existing shareholders were 2.5 times more likely to be a victim, said the FCA, as those nearing retirement and actively looking to invest are the main targets. “With large numbers of people at risk, it’s important to know how to spot the signs of a potential scam,” Wheatley said. “Our message is simple, don’t accept a cold call.”

The pensions industry has already expressed concern that, with changes to pensions rules coming this year; fresh scams are expected to surface encouraging the over-55s to put large chunks of their pension into dodgy investments supposedly offering staggering returns. Clive Osborne was one potential victim targeted by a cold call who, after some communication with the company, realised it was a scam. Osborne, 65, was called by a company out of the blue to see whether he was interested in selling shares that his mother owned. At the time, he had power of attorney for her and was looking to sell. “The company was a brokerage firm from America and they said they were acting on behalf of a client, who wished to buy the shares to make a hostile takeover bid and they were willing to pay a premium on the shares,” he said. “Their website looked very professional, they dealt with mergers and acquisitions and international currency deals and so on. They spoke very well, they were friendly but professional.” He added: “I thought I could spot a scam and, for a long time, I could not spot where the scam was and where they were going to make any money out of it. The deal clincher for me was when they asked for a £5,000 bond to be placed to ensure that this deal went through.” He said that the whole experience had left him feeling “annoyed, a bit guilty, and a little bit perhaps embarrassed that I was almost caught by the scam.” The FCA will be using the £1m it has from the proceeds of crime to invest in national newspaper adverts and online editorial to warn potential victims about investment scams.

Culled from Guardian