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By Wesleyan

Why investment scams are rising - and how to spot them

financial wellbeing
5 min
Mature woman sitting on sofa looking at ipad

As the cost of living continues to rise, many people are feeling the pinch – and feeling more financially vulnerable than ever. Sadly, this presents a window of opportunity for investment scammers.

According to Cifas, the UK’s leading Fraud Prevention Service, more than £890m was lost to investment scams in the 2021/22 financial year. And it’s only likely to get worse, as new scams emerge to take advantage of the current climate.

But how can you spot an investment scam from a genuine opportunity? David Hall, Wesleyan’s Group Information Security Officer shares his top tips:

“It’s important you think before acting and don’t rush into potential investment opportunities. Be cautious of all unexpected calls, emails, and text messages. Don’t assume they’re genuine, even if the person seems to know a lot about you or your previous investments. Always seek reputable, independent advice before you commit to an investment.”

How to spot an investment scam

Do your research

Financial services companies in the UK are legally required to be registered with the Financial Conduct Authority (FCA), unless exempt. You can check the registered status of any company offering investment opportunities on the FCA website. You can also check the FCA list of unauthorised firms. This lists any businesses believed to be involved in fraudulent activities.

Check online reviews

Online reviews can shed light on whether a company is legitimate or not. Reviews listed on company websites can be faked, so look for reviews on sites like Trustpilot and Google Reviews. As it’s easy for unethical companies to pay for fake positive reviews, you should also look for negative reviews.

Don’t trust cold calls

It’s rare for genuine investment companies to cold call you, so be extremely cautious if you receive an unplanned call. No legitimate company will ever pressure you to make a decision.

Analyse emails and texts

If you receive a suspicious email or text, ask yourself these questions:

  • Are there any spelling or grammatical mistakes in the message or links?
  • Does the opportunity seem too good to be true?
  • Are they asking you to visit a URL or open an attachment?
  • Are they asking you for personal information or payment details?

As best practice, you should:

  • Hover over any links to see their potential destination.
  • Check the email address of the sender to see if it’s legitimate.
  • Be wary of any retailers or senders you aren’t familiar with.
  • Avoid sharing personal information online or via email.
  • Avoid using your work email for personal shopping. This will make your account more likely to be targeted with phishing emails or scams.
  • Never immediately trust a recognisable brand name. Scammers often impersonate big brands.

If a message is pushing you to take immediate action, it could be a scam. If you’re unsure, use a search engine like Google to find the company’s official contact details. You can check to see if the email address or any phone numbers match or call them for confirmation.

If you think you’ve been targeted by an investment scam, stop all contact immediately. You can contact Action Fraud if you have further concerns.

Other scams

It’s not just investment scams that are on the rise. Scammers are increasingly impersonating gas companies, parcel providers and more. These are some of the latest scams you should be aware of:

HMRC tax scam

If you’re a self-employed doctor or dentist, you’ll likely be submitting a self-assessment this coming January. HMRC has asked customers to be wary of any communication they receive asking for bank details or personal information.

In the 12 months leading to August 2022, HMRC reported over 81,000 cases of fake tax rebates and even threats of arrest for tax evasion.

Customers are advised to report any suspicious emails to

Purchase scams

With Black Friday on the way and the holidays approaching, it’s important to be cautious of purchase scams. This is when a fraudster will attempt to sell you a non-existent product or a product that is different than advertised. They’ll usually draw you in by offering a cheaper price than major retailers.

Research by Barclays has found that purchase scams have risen by 70% year on year. Warning signs include pressure from the seller and a price that’s too good to be true. If you do fall victim to a purchase scam, contact your bank or money transfer service to report the incident.

Delivery scams

Royal Mail, Evri and other delivery companies have issued warnings to customers around fraudulent text messages and emails. Fake messages include missed delivery notifications, items waiting to be collected, outstanding shipping fees and fake tracking links.

These messages often include a link to an impersonating website that asks for personal details or payments.

If you receive messages of this kind, do not click on any links or attachments. If in doubt, check the official contact details listed on the company’s website.

Impersonation scams

Be wary of any communication you receive from energy companies, councils, banks and other trusted organisations. Scammers will impersonate these businesses, claiming that you’re overdue on payments or even due a refund.

If you have an online account with the company, you can log in to see if you’ve received any official messages. If you’re still unsure, contact the company directly. 

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