The Financial Conduct Authority (FCA) is urging internet users to be more vigilant of potential fraudulent activity online. Online investment fraud sees over £87k lost every single day.
Online has now overtaken phone as the most common contact method for fraudsters. But what is it and how can it be avoided?
What is online investment fraud?
Online investment fraud is a method of scamming internet users out of payments, often offering high financial returns and luxury items.
The most common scams offer high returns on:
- Binary options
- Contracts for difference (CFDs)
- Forex
- Cryptocurrencies (such as Bitcoin)
The scams mainly use advertising on social media websites, with under-25s six times more likely to be scammed than those aged over 55 – the age group historically most at risk of falling victim to fraud.
Why is online investment fraud on the rise?
It is now much easier for internet and social media users to fall victim to a scam. A well-designed website and respectable social media following adds legitimacy to ads and brand names.
Fraudsters are moving from cold calling, to online where they run ads for a range of financial products.
How can I avoid online investment fraud?
There are plenty of measures you can take to avoid falling victim to fraud. The following tips can help you in recognising and avoiding online investment fraud:
- Never give your bank details to anyone you don’t know
- Reject unsolicited investment offers you receive online, on social media or over the phone
- Before investing, check the FCA Register to see if the firm or individual you are dealing with is authorised and check the FCA Warning List of firms to avoid
- Seek impartial advice before making any investment
- Never rely on glowing testimonials. Always research a company before investing.
If you come across a potential scam, make sure you report it to the Financial Conduct Authority.
If you feel like you have been mis-sold an investment, get in touch with our experienced legal team today.