Investment Fraud is any scheme or deception relating to investments that affect a person or company. As traditional investments become less popular due to lower returns, high yield investments have become more attractive to fraudsters. There are many different schemes that attempt to part the unwary from their money. These include:
• Ponzi and Pyramid Schemes
• Land Banking Schemes
• Carbon Credit Fraud
• Share Sale Fraud (Boiler Room Fraud)
• Being cold-called on the telephone by someone who is trying to sell you investments that will supposedly lead to huge financial gains. In reality they may not exist or might be worthless and you should hang up the phone immediately.
• Often scammers will give you details that you might think only a genuine investment company will have e.g. previous investment and share information. Be aware the scammers will do their homework and make it their business to know as much about you as possible.
• The scammers may often call numerous times to develop a relationship. This may lead to a build up of trust as they persuade you to part with your money. They may try to persuade you to invest further money once you agree to invest in the first place.
• Scammers may say they are from well-known investment companies, be sure to check independently.
• Remember: If it sounds too good to be true, it probably is!
• Always seek reputable independent/legal advice before you commit to any investment.
• Before you hand over any money ensure that the firm you use is on the FSA register and is therefore allowed to give financial advice. www.fsa.gov.uk/fsaregister.
• The FSA also maintain a list of unauthorised businesses which is updated regularly. The list details businesses that are believed to be involved in fraudulent activities. www.fsa.gov.uk/consumerinformation.
• Do your own background research. Does the caller have a proven track record that can be verified by an independent party? You can also check whether the company is registered at Companies House and whether the details held there match those you have been given. www.companieshouse.gov.uk/about/fraud.shtml
For reporting urgent matters:
• When an immediate police response is required such as when the suspect is very near or the victim is at immediate risk- dial 999
• Where a police response is required such as for victim care or the suspect can be easily identified - dial 101 or go into your local police station
For reporting investment fraud and scams:
Action Fraud, a national fraud reporting initiative, should be contacted to report an investment scam or if you are suspicious. Action Fraud will be able to give you further advice and your report will be appropriately dealt with. You can report either online or over the telephone.
Avoid being tricked into Ponzi and Pyramid scams.
Ponzi and Pyramid Scams
Information on Carbon Credit fraud.
Avoid becoming a victim of share sale fraud.