Investment scams steal staggering £2.6billion from Britons | Personal Finance | Finance

More than £2.6billion has been stolen through investment fraud in the UK since the start of 2020, according to new research.

The figures, sourced by the Pensions Management Institute (PMI), show that between January 2020 and December 2023, there have been 98,525 victims of such scams. During this period criminals managed to steal the equivalent of nearly £13million every week.

Victims typically lost an average of £26,773 to these investment scams over the period.

Of the investment scams, Boiler Room fraud is one of the most common, costing victims £553million in the three-year timeframe.

According to PMI, this is a type of fraud where victims are cold-called by fake stockbrokers and encouraged or persuaded to buy shares or bonds in worthless, non-existent, or near-bankrupt companies.

Since January 2020, 20,789 people in the UK have fallen victim to this type of fraud.

Ponzi or pyramid schemes are other common forms of investment fraud, with 12,323 victims in the UK since the start of 2020, losing £499million.

Ponzi schemes involve investors being lured to make payments with promises of unusually high returns. However, no actual investment is carried out on their behalf.

Early investors are paid returns with the investment money received from the later investors until the scheme collapses.

In 2023, 26,740 people fell victim to investment fraud, marking the highest number of victims among the four years covered in this research.

Investors lost £527million to these scams, equivalent to more than £1.4million each day. Boiler Room frauds stole £106million in 2023 alone, while Ponzi schemes took £63million.

Robert Wakefield, president of the Pensions Management Institute, commented: “Our research shows that a shocking number of people are falling victim to investment fraud.

“It is concerning that every year thousands of people are losing millions of pounds to financial scams in the UK. The number and sophistication of investment scams is ever-growing.”

How to avoid investment fraud

The Financial Conduct Authority (FCA) shared a few pointers to help people determine whether they are being scammed.

Firstly, the FCA asks people to question whether the correspondence is unexpected. It noted: “Scammers often call out of the blue. They may also try and contact you via email, text, post, social media, or even in person.”

Secondly, people should question whether they feel pressured to act quickly. The FCA said: “Scammers might offer you a bonus or discount if you invest quickly, or they may say the opportunity is only available for a short time.”

Additionally, people may want to consider if the deal feels too good to be true. The FCA said: “Fraudsters often promise tempting rewards, such as high returns on an investment.”

Mr Wakefield added: “By maintaining a healthy dose of scepticism and training yourself to spot some common red flags, you may be able to protect yourself and your loved ones from becoming victims.

“Increasing the amount of financial education provided in schools could also help to make people more aware of the risks of investment scams.”