Investment scams are becoming increasingly sophisticated, using AI-generated videos of respected public figures to advertise their products. A healthy degree of scepticism is always wise, but there are a number of other ways that you can protect yourself, friends and family from falling victim to a scam.
Warning signs
• “Too good to be true” – any investment that promises high, quick or “guaranteed” returns with low or zero risk is the main red flag. No genuine investment can guarantee a set return and the risks as well as the potential returns should always be clearly explained.
• High-pressure sales tactics – investments should only be made after careful consideration, and are not a product that you should feel you are being sold. There may be genuine reasons to act fairly quickly, for example using your ISA allowance before the end of the tax year, but a “deal available for a limited time only” is another red flag.
• Insisting on secrecy – any genuine investment firm will be happy for you to discuss your options with family, friends or a trusted adviser.
Do your research
• Check the FCA (Financial Conduct Authority) register – most firms offering regulated financial services in the UK must be authorised by the FCA. You can check details at FCA Firm Checker.
• Beware of clone firms – scammers can impersonate legitimate companies, using a similar name and branding. You can always check with the firm using the contact details found on the FCA register, or contact the FCA directly to confirm if the firm is genuine.
• Challenge any information you are given – a genuine firm will welcome queries and be happy to provide verification. Taking time to verify information and seeking independent advice can significantly reduce your risk of falling victim to scams.
If you think you may have been targeted by a scam, you can contact the FCA helpline on 0800 1116768 or Report Fraud on 0300 1232040.
This article is for information only and should not be construed as advice or a recommendation. You should always seek independent financial advice prior to taking any action.
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