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How to avoid investment scams

Publication date:

09 September 2020

Last updated:

09 September 2020

Author(s):

Personal Finance Society

The UK Industry regulator FCA, Financial Conduct Authority, is urging individuals to be ‘ScamSmart’ especially in the covid-19 virus outbreak period.

Spot the warning signs:

  • Unexpected contact – Traditionally scammers cold-  call but contact can also come from online sources e.g. email or social media, post, word of mouth or even in person at a seminar or exhibition.
  • Time pressure – They might offer you a bonus or discount if you invest before a set date or say the opportunity is only available for a short period.
  • Social proof – They may share fake reviews and claim other clients have invested or want in on the deal.
  • Unrealistic returns – Fraudsters often promise tempting returns that sound too good to be true, such as much better interest rates than elsewhere.
  • False authority - Using literature and websites that are hard to distinguish from the real thing, claiming to be regulated, speaking with authority on investment products.
  • Flattery – Building a friendship with you to lull you into a false sense of security.

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