Over 8,000 investment fraud reports have been recorded by the National Fraud Intelligence Bureau in the first six months of 2019, almost double the amount during the same period last year, according to fresh figures obtained by AJ Bell through a freedom of information request.
The statistics suggest a rapid surge in investment fraud reporting, with this year set to break all previous yearly records. Interestingly, the number of pension fraud reports has dropped rapidly over the same period, from 1,353 in 2015 to just 345 in 2018.
Tom Selby, senior analyst at AJ Bell, believes that the results suggest that the exclusion of investments from the cold calling ban remains problematic.
He explained: “The surge in investment scam reports also suggests politicians and regulators need to focus their attention on this area. In particular, the Government should review its decision to exclude investments from the cold-calling ban introduced for pensions in January this year.”
Mr Selby further argued that positive government interventions had resulted in a shift from pension-focused scams to investment scams.
He said: “Financial fraud in the UK is mutating, with the number of victims of older-style ‘pension liberation’ scams dropping in recent years on the back of a series of Government interventions – including the ban on cold-calling – and a significant industry-wide public awareness campaign. However, as pensions-based scam reports have fallen, the number of people falling prey to scams focused on their investments has continued to rise and look set to hit record highs in 2019.
The senior analyst also acknowledged that the spike in reporting figures could be also be a consequence of more people reporting scam attempts to the relevant authorities, meaning that public awareness was possibly a factor alongside evolving fraud methods.
He still, however, considered the results for the first six months of the calendar year to be a matter of concern.
“Either way, these figures clearly demonstrate that scams remain a clear and present danger to savers who need to be vigilant when deciding how to invest their money. Although cold-calling is just one tactic scammers use to target savers, it remains a common one which preys on the most vulnerable in society,” he added.
When it came to challenges presented by scams, Mr Selby also noted that the online nature of many scams made it increasingly difficult to the prevent, especially due to the global nature of scams utilised through social media. Alongside expecting the regulator to continue its “awareness-raising efforts” he felt that investors needed to become more vigilant. This includes terminating cold-calls about pensions and investments, being sceptical of free advice, and checking the FCA register for the credentials of any adviser.
“Rather than waiting for the Government to intervene, the best way for people to avoid being scammed is to tool up their knowledge so they can protect themselves,” Mr Selby concluded.
