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The Actuary The magazine of the Institute & Faculty of Actuaries

FCA warn over 55s of risk from investment fraudsters

The Financial Conduct Authority (FCA) have revealed the tactics used by investment fraudsters, after new research commissioned by the regulator showed victims lost an average of £32,000 last year.

"If it sounds too good to be true then it probably is” ©Shutterstock
"If it sounds too good to be true then it probably is” ©Shutterstock

People aged 55 and over are increasingly being targeted by the perpetrators, who see them as more likely to have money to invest, and vulnerable to their psychological tactics.

These include offering lucrative returns, downplaying the risks, using flattery, saying the deal is only available to the target, asking them to keep it secret, and applying pressure to invest with a time-limited offer.

Television presenter, and supporter of the FCA’s ScamSmart campaign, Nick Hewer, said: “As someone who has been approached by scammers myself, I know how hard it is to identify whether an investment offer is legitimate.

“They’re very clever these people, playing psychological games to win over the trust of often vulnerable victims and that’s why I’m working with the FCA to raise awareness of this troubling issue.

“Remember, if it sounds too good to be true then it probably is.”

The FCA’s research involved surveying 1,004 people aged 55 and over between 27 January and 6 February 2017, with only 42% of respondents saying they believe they know how to spot a fraudulent investment opportunity.

In addition, more than a third believe behaviour like acting quickly, and keeping offers secret, can be key to getting a good deal – despite being common tactics used by fraudsters.

It was also found that those surveyed were more aware of certain signs of investment fraud than others, with 92% agreeing that being called out of the blue could be a warning sign, but 19% are unaware that being promised returns above the market rate could also be a tactic.

FCA director of enforcement, Mark Steward, said: “Be alert to the warning signs like being contacted out of the blue, promises of low risk and/or guaranteed above market returns, special deals just for you, time pressure and, very often, flattery.

“Be vigilant. Don’t let them push you into making a decision and parting with your money. Question their claims. Check the Financial Services Register and seek impartial advice. If in any doubt – don’t invest.”

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