Investment Fraud starts when you get a cold call from someone pretending to offer you the opportunity to invest in a variety of schemes or products that are either worthless or don’t even exist. These may have come about due to a reply to an online article or advertisement.
Investment fraud is also known as share sale fraud, hedge fund fraud, land banking fraud or bond fraud.
The majority of investment frauds are run out of offices known as 'boiler rooms'.
- Never take up offers of investments on the spot from cold calls. To make safe investments, take a look at the Financial Conduct Authority’s ScamSmart warning list.
- Don’t give your bank account details or sensitive information.
- These 'Boiler rooms' tend to target people over the age of 65 or those who are vulnerable. Talk to elderly family members and vulnerable people you care for to make sure they know how to spot bogus investments.
Spot The Signs
- You’re contacted out of the blue with the investment offer.
- You’re shown glossy brochures, professional-looking websites and certificates that make them look authentic.
- You’re pressured into making rushed decisions with no time to consider the nature of the investment.
How it happens
You’re called by a professional-sounding broker who offers you investment opportunities that offer incredible potential for making profit. They usually offer to sell you shares or bonds, but may also offer other investments such as precious metals such as gold, silver or diamond, or wine, art or energy.
You’re also promised free research reports, special discounts and ‘secret’ stock tips. They’ll tell you how your investment has progressed and give you the chance to invest in more of the same products or stock in using a variety of schemes to make the venture sound credible.
They usually hire out prestigious city offices, offering websites and literatures and send you official-looking documents to make their enterprise look legitimate.
In reality, the fraudsters are cold calling as many people as possible to pay for bogus investments. Once the fraudsters have made you invest as much money as possible, they quickly disappear just before you’d expect to get the extra money you made from your investment.
The resources they offer don’t exist, or they haven’t told you that your investment is worthless. For example, they’ll sell land that has no potential for development, or rare stones that aren’t worth as much as they sound.
You may be told to keep your investment secret to ensure you receive maximum returns, but really the boiler rooms want to prevent you from telling others to avoid being spotted.
How to report it
Boiler rooms have been known to harass victims who have reported them, so don’t feel like you’re at fault. Report it to Action Fraud online or call 0300 123 2040.
Tell your bank immediately if you’ve given the fraudsters your bank account details and keep any written contact from the boiler rooms.
Guaranteed investment opportunity, but does it add up?
Investment fraudsters may make contact by telephone, letter or email using high-quality literature to make them appear genuine.
They will offer you the opportunity to invest in a variety of schemes or products that are either worthless or do not exist.
The most common investment frauds offer shares in land, wine, fine art, diamonds, energy and cryptocurrencies such as Bitcoin.
Notify your bank if you gave out your bank or card details.
Report fraud to Action Fraud on 0300 123 2040.
Protect yourself - have you:
Been offered 'too good to be true· investment opportunities?
- Received unexpected correspondence?
- Received glossy brochures and literature?
- Been promised 'secret' stock tips?
- Felt pressured into making a decision?
Protect others - have they:
Been inundated with calls or letters?
- Invested before discussing with others?
- Become very secretive about money?
- Taken out loans in order to invest more?
- Checked the company is registered with the Financial Conduct Authority?
Leaflet for Printing
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