Investment scams rose 400% since the first lockdown in March.
Scammers have been using more sophisticated tactics to make nearly £10m from UK investors.
They are cloning manager’s websites, products and documents as well as creating fake price comparison websites.
The total reported scams increased from 300 to 1175 according to the Investment Association.
“In a year clouded in uncertainty, organised criminals have sought opportunity in misfortune by attempting to con investors out of their hard-earned savings,” said Chris Cummings, chief executive of IA.
The losses from this increase in fraud added up to £9.4m from March to October.
The IA discovered scammers had even been using these fake price comparison websites to advertise fake products on social media and search engines.
“The investment management industry is working closely with the police and regulators to stop these scams, and is collaborating with our partners in government to close them down and prevent them being advertised in the first place,” Mr Cummings added.
Britain’s Action fraud revealed earlier this month that scam victims lost nearly £657m this year, a rise of 28%.
“The coronavirus outbreak sadly led to many people losing their job or having to manage with a lower income than they were used to” said Pauline Smith, head of Action Fraud.
“It has also caused a shake up in the economy in general, with interest rates falling, in a similar way to the financial crisis of 2008.
“All of these factors provide criminals with the opportunity to attract more people with their fraudulent investment schemes.
“Preying on people when they are at their most vulnerable really shows how low these criminals will stoop to make a profit for themselves.”
“Just because a company has a glossy website and glowing reviews from ‘high net worth’ investors does not mean it is genuine,” Action Fraud warned.
Investment scams up 400% – What can you do?
Here are some basic rules to keep you safe from Action Fraud:
- Be suspicious if you are contacted out the blue about an investment opportunity. This could be via a cold-call, an e-mail or an approach on social media.
- Don’t be rushed into making an investment. No legitimate organisation will pressure you into making a transaction, or committing to something on the spot. Take time to do your research.
- Seek advice from trusted friends, family members or independent professional advice services before making a significant financial decision. Even genuine investment schemes can be high risk.
- Use a financial advisor accredited by the Financial Conduct Authority. Paying for professional advice may seem like an unnecessary expense, but it will help prevent you from being scammed.
- Use the Financial Conduct Authority’s register to check if a company is regulated. If you deal with a firm or individual that isn’t regulated, you may not be able to get your money back if something goes wrong and its more likely to be a scam.
- Just because a company has a glossy website and glowing reviews from ‘high net worth’ investors does not mean it is genuine – fraudsters will go to great lengths to convince you they are not a scam.
- Remember, if something sounds too good to be true, it probably is.
To avoid these scams and stay up to date with the latest threats to your wallet, you can navigate to the Financial Conduct Authority website, which has a live feed dedicated to scams and fraud.