The Financial Conduct Authority (FCA) has warned older people to take care when chasing higher rates of return on their savings through dubious investments.
31 MAY 2016 | MARK SMULIAN
It has found that more than a quarter of those aged over 55 who fell victim to investment fraud were scammed by an unauthorised firm selling unregulated products, such as wine, diamonds and land.
An FCA study has discovered that low savings interest rates are one of the main reasons why older people consider unfamiliar types of investment products - most commonly as a result of unsolicited telephone calls.
The study formed part of the FCA's ScamSmart campaign, to help protect investors from fraud. It found 41% of respondents had moved money out of savings into riskier investments to try to get a better rate of return. Of those questioned, 26% invested in unregulated investment products and 23% considered doing so in future.
Among those who fell victim to investment fraud, 27% had bought an unregulated product through an unauthorised firm. The survey found 22% of retired people holding unregulated products had invested more in these over the last year than ever before. Those considering such investments said they would put in an average of over £4,000, with land, wine and art the most popular choices.
Despite the risks, 48% of those investing in unregulated products through unauthorised firms did not take professional advice or check information, such as the FCA's warning list.
FCA director of enforcement Mark Steward said: "You don't need to be gullible to lose money to a scam or fraud. Fraudsters target financially sophisticated people too, who often don't like to ask what might sound like silly or basic questions.
"If you are contacted out of the blue about an investment opportunity that sounds too good to be true then it probably is. We would urge you to be sceptical."
He urged anyone who has fallen victim to a scam to notify the FCA.