Worrying Figures In the UK Finance Annual Fraud Report Show Investment Fraud Is On The Rise

Justin Freeman

Investment Fraud Is On The Rise

The latest Annual Fraud Report produced by UK Finance makes grim reading for everyone except the scammers. Between 2020 and 2021, the total amount of reported investment fraud was up by more than 57%, with £171m lost. The data only scratches the surface because not all fraud is reported. An equally worrying trend is that more people are getting caught out by scams. The 12,074 cases reported in 2021 was a 48% increase on the number for 2020.

Criminals are making ground in terms of being able to convince victims to move their money to a fictitious fund or to pay for a fake investment. The sectors that they target are many and varied but include high volatile instruments such as cryptocurrencies and carbon-based investments, where their promises of high returns appear plausible.

More bad news is that investment fraud is increasingly the go-to-market for scammers. The UK Finance report breaks scams into eight categories. In 2021, investment fraud accounted for the largest proportion of losses. The £171m loss trounces the totals reported by malicious payee scams, purchase scams, romance scams, advance-fee scams and malicious redirection scams.

what is being done to stop scams

How The Scams Work

Criminal gangs are well-organised, ruthless and tech-savvy. They’re also hard to discourage easily due to the average payout on an investment scam being more than £14,000. They are systemically bypassing banks security measures by directing their efforts at the customer outside the payments journey.

Social engineering tactics involving deception and impersonation are a key driver and notably increased during the COVID pandemic and lockdown. Criminals use social media channels such as Instagram and Facebook to lure in their victims. One often-used approach is to use adverts relating to investments that never materialise once the victim’s payment has been made. Other scams involve the use of the telephone, email and text messages and scammers posing as a genuine individuals or organisations.

What’s being done to stop scams

The banking and finance industry continues to invest billions in tackling fraud. But the producers of the report themselves acknowledge that it is only through improving the levels of coordination and collaboration that they’ll be able to ‘shift the dial’. This task is made harder by the fact that criminals are notoriously able to stay one step ahead of the authorities.

Investor education is another option – individuals have to be responsible. Brushing up on these guidelines on how to protect yourself from an investment scam are a good place to start, and the list of scam brokers to avoid includes the names of firms on the ForexFraud blacklist.

Crowdsourcing information about scam brokers can help others avoid falling into the traps set by disreputable brokers and you can share your experiences here. If you would like to know more about this particular topic or have been scammed by a fraudulent broker, you can also contact us at [email protected]

Justin Freeman

Latest news

iEarn Bot – One of the Largest Scams to Date Unravels
Thousands left with huge losses after investing in iEarn Bot scam. Read more
Binance Pulls the Plug on UK Cash Deposits – and Withdrawals
Crypto exchange Binance stops accepting deposits made in British pounds. Read more

Safest Forex Brokers 2023

Broker Info Best In Customer Satisfaction Score
#1 AvaTrade LogoYour capital is at risk Founded: 2006 Globally regulated broker
Number One Broker
#2 BlackBull Markets LogoYour capital is at risk Founded: 2014 Global Forex Broker
Number One Broker
BEST SPREADS Visit broker
#3 73 % of retail CFD accounts lose money Founded: 2014 Global Forex & CFD Broker
Number One Broker
Best Trading Conditions Visit broker
#4 Forex Broker eToro Logo67% of CFD traders lose Founded: 2007 Global CFD & FX Broker
Number One Broker
#5 Plus500 Logo79 % of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Founded: 2008 Global CFD Provider
Number One Broker
Best Trading App Visit broker

    Forex Fraud Certified Brokers

    BlackBull Markets Logo
    AvaTrade logo
    XM Logo
    IQ Option Logo
    Exness Small Logo
    IC Markets Logo
    ATFX Logo
    skilling logo
    LegacyFX Small Logo
    Forex.com Logo
    City Index Logo
    HYCM Logo
    OctaFX Logo
    CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.