With Investments – There are no Guarantees: FBI Issues Warning Over Big Claims

Investment scams are a growing threat for even the most seasoned investor looking for their next opportunity. These scammers are highly skilled at using sophisticated social engineering and manipulation techniques to deceive individuals into giving away their hard-earned cash.

There are several common tactics used by investment scammers, including:

• Posing as legitimate investment firms.
• Using stolen cryptocurrency wallets.
• Engaging in illegal trading.
• Creating fake trading websites and social media accounts.
• Setting up phishing pages.

Many of these scams involve what is known as Authorised Push Payment (APP) fraud, where the victim is coached and manipulated into willingly transferring money to the scammer’s account under the guise of a legitimate transaction.

Once the payment is made, the criminals usually move the funds to another account, often offshore, making it incredibly difficult to trace the money. This is why it is crucial to be aware of the warning signs of investment scams and to take steps to protect yourself and your finances.

It is important to be aware of the warning signs of investment scams, but there are also practical steps you can take to protect yourself and your finances from fraudsters.

As well as treating any ‘guaranteed returns’ with a heavy dose of suspicion, it is also important to remember the following:

• Do not respond to unsolicited calls, texts, emails, social media requests or door-to-door visits offering investment opportunities, as legitimate and regulated companies will never reach out to you in this manner.
• Use the Financial Conduct Authority’s (FCA)* resources to back up your research into any potential investment opportunity.
• Use the FCA’s online warning list tool to verify investment opportunities (if the option is on the list, do not proceed) and check the FCA Financial Services register to confirm that the firm or individual is registered.
• Conduct your own research and seek out online reviews.
• Seek impartial advice from a regulated, FCA-authorised financial adviser.
• Do not rush into any decision and take the time to weigh your options; genuine firms will not pressure you into investing.

*The FCA is the regulator for UK financial services and the financial markets.

It is crucial to take action immediately if you believe that you have been a victim of an investment APP scam by reporting the fraud to your bank, the police, and Action Fraud the National Fraud and Cyber Crime Reporting Centre.

Your bank should investigate the case, and in some circumstances, you may be able to secure a refund from your bank; however, since the money has often been moved, a refund may not always be possible. Increasingly, banks are being held accountable if they have not taken sufficient measures to protect their customers from fraudsters.

If your bank refuses to compensate you for losses incurred due to investment push payment scams and you believe it could have done more to protect you and your money, you can take the matter to the Financial Ombudsman Service (FOS), an independent, Government-backed organisation responsible for settling disputes between consumers and financial institutions, such as banks.

Commenting on the FBI’s advice, Head of Professional Negligence at TLW, Sarah Spruce, said:

“There are no guarantees in life, or investing, and it is important that anyone looking into investing their money makes themselves aware of the red flags and buzz words used by scammers. Investing, like anything, takes time and work and these scammers are using the lure of ‘getting rich quick’ to snare unsuspecting investors.

Banks in the UK are aware of these tactics, and suspicious activity should be flagged to customers, but increasingly FOS decisions are highlighting that this is not always the case! It is important not to feel embarrassed by being taken in by big claims, and get in touch with someone who might be able to help claim compensation for you.”