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Investors warned about large-scale sophisticated scams

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Written by: Emma Lunn
14/07/2020
Criminals are impersonating investment managers, cloning brands, copying their products and promoting them through fake price comparison websites.

Fraudsters are targeting retail investors in new, sophisticated and large-scale scams which aim to convince savers to purchase bogus investment products and disclose their personal details, according to the Investment Association (IA).

The association said fraudsters were using sophisticated targeting of victims through sponsored Google and Facebook links and harvesting personal details from fake call centres.

In some cases, scammers have set up a range of email addresses and used the names of genuine members of staff in investment management firms.

A number of firms across the industry have been affected and about 300 incidences of this fraud have been reported to date. The estimated total loss to savers is approximately £4m.

Reports of this scam activity spiked three months after the start of lockdown, as savers approached firms concerned about not receiving their expected quarterly interest payment.

Only on contacting the genuine firms did those affected realise they had been the victims of fraud.

Investment managers are urging their customers and the public to be vigilant, and are working closely with regulators and law enforcement to tackle this fraud.

Chris Cummings, chief executive of the Investment Association, said: “During this time of great uncertainty, serious organised criminals have ratcheted up their operations and are increasingly ruthless in their mission to steal from investors. Our industry is determined to counter this threat, and will continue to work closely with the police and regulators to bring an end to these scams.

“Fraud and scams come in many different disguises. That’s why today we urge savers and investors to be as vigilant as possible to protect their investments and think very carefully about the risks criminals pose to their financial wellbeing.”

Investors should be particularly on the lookout for the details of the contracts offered to them, and instances of cold calls.

Contact from people claiming to be from investment firms should be verified with the genuine investment firm involved.

In some instances the bank accounts used are not in the names of the purported investment management firm and do not match the pre-sale literature. Investors should also be vigilant if they are placed under time pressure to invest – a common feature of fraud.

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