Scammers masquerading as legitimate investment managers have duped retail investors out of £10m since the first Covid lockdown, according to figures from the Investment Association.
The UK trade body said fund groups had reported 1,175 incidents of organised criminals impersonating their products, websites and documentation, between July and October, four times higher than the 300 incidents flagged over the first six months this year.
Since its last report in July the amount stolen by scammers has more than doubled from £4m to £9.4m and more than 200 ordinary savers have been affected.
The IA said fraudsters had sought to take advantage of the confusion and chaos around the Covid crisis and had been luring victims in using fake comparison websites and adverts on social media and search engines. Almost all of the 300 incidents reported over the first half of the year occurred after mid-March when the UK entered lockdown.
“In a year clouded in uncertainty, organised criminals have sought opportunity in misfortune by attempting to con investors out of their hard-earned savings,” said IA chief executive Chris Cummings (pictured).
“Retail investors are today being urged to be extra vigilant in order to protect themselves from these scams.”
The IA said the investment management industry has been working closely with the police and regulators to stop the scams as well as collaborating with the government to prevent fraudulent ads from going live.
The Financial Conduct Authority has also been cracking down on phony ads and has fiercely criticised Google for failing to police adverts that promote online scams.
“Fraud and scams come in many different disguises,” Cummings said. “That’s why, as we approach the festive period, we urge savers and investors to be as vigilant as possible to protect their investments and think very carefully about the risks of fraud when making investment decisions.”
Investors who suspect fraudulent activity should follow the advice of the National Crime Agency:
- Stop: Taking a moment to stop and think before parting with your money or information could keep you safe.
- Challenge: Could it be fake? It’s ok to reject, refuse or ignore any requests. Only criminals will try to rush or panic you.
- Protect: Contact your investment manager immediately if you think you’ve fallen for a scam and report it to Action Fraud. Speak to your bank as soon as possible if you believe you have transferred money to a scam.
See also: FCA’s hands tied as firm plagiarises wealth managers to target pensioners
