According to the Financial Conduct Authority (FCA), investors in the UK lost a total of £197 million in scams, with victims losing an average of £29,000 each.
The most commonly reported scam during 2018 involved shares and bonds, forex and cryptocurrencies, altogether accounting for 85% of all suspected investment scams reported last year.
The FCA said the profile of investment scams is changing as people are increasingly targeted online, moving away from the traditional cold call. Fraudsters are now contacting people through emails, professional-looking websites and social media channels, such as Facebook and Instagram.
Investment scams are becoming more and more sophisticated and fraudsters are using fake credentials to make themselves look legitimate.
What is important to note is that the real cost is not only the £197m lost by victims of fraud, but the untold amount of investment growth that potential investors forego because they fear being scammed or do not feel able to discern legitimate investment opportunities from the fakes. Investment scams damage public trust in financial services as a result.
Financial literacy is of utmost important and on our site, we try as much as possible to provide easy to understand manuals for those who are beginning their journey in the investment world.
Furthermore, our Guidesinclude specific tips to help you choosing the right broker and avoid unpleasant situations.
ELP Finance LTD provides investment advisory services which are licensed and regulated by the MFSA – click here to know more