The Investment Association (IA), the trade body for the investment management industry, said scams where criminals create duplicates of credible websites, emails or investment WhatsApp groups were on the rise, with 478 reports of firms being impersonated by fraudsters in the second half of last year.
Almost a quarter of these attempts were successful, with investors losing £2.7m, the IA said, adding that the growth of artificial intelligence (AI) would make cloning attempts increasingly sophisticated in the future.
Adrian Hood, regulatory and financial crime expert at the IA, said: “Criminals will use a variety of means to trick people into parting with their money, whether that’s impersonating genuine investment managers, stealing card details, or fraudulently logging into a person’s account.
“That’s why we’re urging consumers to stay vigilant. With cloning scams topping the list of threats, consumers should double check whether websites or emails are legitimate before transferring any money.”
Three scams to study
The IA highlighted three main types of scams that investors are hit by, with cloning at the top of the list.
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The other two are card fraud and account takeover. With card fraud, a criminal uses false or stolen debit card details to make an investment. In H2 2024, there were 17 reports of this type of fraud.
Account takeover happens when a fraudster uses information they have gained about an individual to change the address or payment details of an account, in order to cash in the investment and gain the proceeds for themselves.
In H2 2024, there were 132 reports of this type of fraud.
Protecting yourself
Hood suggested the following ways to protect yourself against scams:
- Stop: Take a moment to stop and think if someone asks for your money or information about you. Double check a sender’s email address or website URL – criminals often use addresses that look like legitimate ones but may have slight differences.
- Challenge: Ask yourself: “Could it be fake?” It’s ok to reject, refuse or ignore any requests.
- Protect: If you think you’ve been scammed, contact your investment provider or platform immediately, ensuring these are the genuine contact details, and report it to Action Fraud.
Action Fraud is the UK police’s fraud reporting service and can be contacted on https://www.actionfraud.police.uk
