Investment scams 2021: how to spot a scam, protect yourself from fraudsters and report fake texts during pandemic

The number of reported investment scams increased by 79% during 2020, a study has shown.

Research conducted by the Nationwide Building Society showed the significant hike in the number of its members reporting investment scams during the Covid pandemic.

A separate survey of 2,000 people conducted by the building society found that 44% of respondents would consider turning to investments in the hope of bigger returns.

A fifth (20%) do not know where to get information and advice while 22% don’t know how to check whether an investment company is genuine or not, according to the survey.

This is despite recent concerns and warnings raised about fraudsters advertising online.

How can I spot an investment scam?

If you are not sure about something then don’t commit until you are 100% comfortable.

Nationwide say there are ways to spot a scam, which include unexpected contact, pressure from the scammers to sign up, ‘proof’ of fake reviews and endorsements on social media, unrealistic returns, false authority, and flattery.

Ed Fisher, head of fraud policy at Nationwide, said: “One of the unfortunate side effects of the pandemic has been a rise in investment scams.

“Criminals try to take advantage of any uncertainties and a low interest environment to target people with increasingly sophisticated tactics.

“And they are bold too – they even target victims again with ‘recovery scams’ by promising to get their money back for an upfront fee.

“It’s crucial to undertake proper research and due diligence before handing over your money.

“Being especially cautious is the best defence, even if you are proactively looking for an investment and you find what appears to be a legitimate company, you still need to confirm the site is genuine and you are dealing with someone who works there.

“And take care to question where the money is going. We will always warn you if an account name and number don’t match, so if someone tells you to send it to a name that’s different to the exact trading name of the firm, it could well be a scam.

“Always check the FCA (Financial Conduct Authority) Register and the FCA Warning List as it has listings of legitimate firms’ details, and firms that are known to be impersonated.”

How can I protect myself from fraudsters?

Do your own research by checking firms out using the FCA website, using its Register and Warning List of firms, and getting independent advice.

Nationwide said people should check payment details thoroughly and not be fooled by stories about why a payment needs to go to a slightly different account name than the company name.

How do I report a scam?

Reporting a scam can help to track down and stop scammers from doing it to someone else.

In the event you have been scammed, or notice an attempt to be scammed, then there are steps you can take to protect yourself and others.

Gather as much information as possible and report the scam, or attempted scam, to one or more organisations, including the Citizens Advice Bureau.

You are advised to contact the police immediately by calling 101 if the scammer is in your area, or you’ve transferred money to the scammer in the last 24 hours.

Call 999 if you feel threatened or unsafe.

By reporting the scam to different organisations you increase the chances of the scammers being caught or stopped.

The Financial Conduct Authority (FCA) deals with scams involving cryptocurrencies, investments, insurance or pensions. Report it here.

All scams can be reported to the UK’s national reporting centre for fraud, Action Fraud, which will follow it up and issue a crime reference number if required.

A crime reference number can be helpful if you need to tell the bank you’ve been scammed, which will help towards getting your money back.

If you’ve received a scam email then forward it to [email protected], or by post then contact the Royal Mail via [email protected].