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New fraud risk targeting investors revealed

by LLB Editor

Fraudsters are targeting retail investors in new, sophisticated and large-scale scams, convincing some savers to purchase bogus investment products and disclose their personal details, the Investment Association (IA) warns today.

Investment managers have reported serious organised criminals are impersonating their products, in particular investment bonds, promoting them through fake price comparison websites, and cloning their brands to produce fake documentation.

Fraudsters are using sophisticated targeting of victims through sponsored Google and Facebook links and harvesting personal details from fake call centres. In some cases, scammers have set up a range of email addresses and used the names of genuine members of staff in investment management firms. A number of firms across the industry have been affected and approximately 300 incidences of this fraud have been reported to date, with an estimated total loss to savers reported of approximately £4m.

Three months after the start of the COVID-19 lockdown, reports of this scam activity have spiked as savers approached firms concerned about not receiving their expected quarterly interest payment. Only on contacting the genuine firms did those affected realise they had been the victims of fraud. Investment managers are now urging their customers and the public to be vigilant, and are working closely with regulators and law enforcement to tackle this fraud.

Chris Cummings, Chief Executive of the Investment Association, said, “During this time of great uncertainty, serious organised criminals have ratcheted up their operations and are increasingly ruthless in their mission to steal from investors. Our industry is determined to counter this threat, and will continue to work closely with the police and regulators to bring an end to these scams.

“Fraud and scams come in many different disguises. That’s why today we urge savers and investors to be as vigilant as possible to protect their investments and think very carefully about the risks criminals pose to their financial wellbeing.”

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