The coronavirus pandemic has led to a troubling increase in criminal activity, with the number of investment scams quadrupling since March of this year.
Using increasingly sophisticated methods, scammers have conned UK investors out of nearly £10m, according to the Investment Association.
Organized criminals have taken advantage of the uncertainty, confusion, and economic worry of 2020 to make a profit by manipulating and tricking investors into parting with their savings. Methods include constructing fake comparison websites and duplicating fund manager documents, websites, and products.
In 2019, there were around 300 reported scams, but this year the number has rocketed to 1,175 between March and October.
Investment Association Take Action
Chris Cummings, the chief executive of the Investment Association, reassured investors that they were working closely with regulators, the police, and government to prevent further scams.
The IA discovered that criminals were advertising non-existent products on fake price comparison websites and using social media and search engines to advertise them, preying on those seeking financial stability and security for their investments during lockdown.
The IA has a dedicated webpage to report and identify known scams with the immediate goal of stopping them being advertised in the first place.
Action Fraud also issued warnings about the rise in cybercrime, stating:
“just because a company has a glossy website and glowing reviews from ‘high net worth’ investors does not mean it is genuine.”
Action Fraud also recently revealed that over £657m had been lost to investment fraud during 2020, a 28% increase from the previous year, with many scams encouraging investors to take advantage of the financial impact of lockdown.
Additionally, UK Finance found that one in three people in the UK have been the victim of a scam attempt, with criminals fraudulently claiming to be trusted institutions such as HMRC or the NHS.
Investors and the general public are warned to be wary of unsolicited emails, calls, and texts, particularly those claiming low-risk, high reward investment opportunities.
If an opportunity seems too good to be true, it probably is – always ensure that you’re communicating with a legitimate source and never give out personal information.