The investment market extremely vulnerable to abuse by fraudsters. Many emerging markets remain unregulated making it very difficult for authorities to enforce good working practices. Common investment scams include buying rare materials, diamonds or other gemstones, wine, land, carbon credits and alternative energy. Many people have lost their entire life saving to investment scammers. Don’t let it be you!
What you should know
- Scammers will cold-call you by telephone and try to sell you investments in emerging markets that they claim will lead financial gains above the rates of established investments like ISAs. In reality the item offered may not exist or is worthless. Be wary of any investment company cold-calling you- they may be fraudsters!
- Often the scammers will give you details that you might think only a genuine investment company will have. They may have details of previous investments you have made, shares you hold and know your personal circumstances. Be aware the scammers will do their homework and make it their business to know as much about as possible.
- The scammers will often call you a number of times in an attempt to form a friendly relationship. If you respond in any way they will persist, try and build trust and eventually persuade you to part with your money. Having obtained some money from you they will probably call again and try to persuade you to “invest” more money, perhaps in a different commodity.
- Scammers may say they are from a reputable investment company, some will say they are stockbrokers or consultants. Always seek independent financial advice before you commit to any investment.
- Be wary of companies trying to recover money from lost investments on you behalf for a ‘one-off’ fee – this could be a recovery room fraud trying to scam you again. Similar to the investment they are to know about your previous investment history.
UK pension fraud
- If you are over 55, from April 2015 changes in the law in the UK will allow you to access your pension savings if you have paid in to a UK pension. You will have control of your pension pot and it is for you to decide how to invest the money.
- Scammers may target you to try and steal your pension savings by persuading you to cash out your pension and put your money in to fraudulent and unregulated investments with the promise of high returns.
- If you are under 55 you can transfer your pension to another scheme. However, you cannot access the funds uncles you are seriously ill. If you are offered a cash incentive to transfer your pension, be aware that you are like to face tax charges in excess of half your pension savings.
- If you are cold-called, have received a text message, email or similar unsolicited approach offering a pension review, beware. It may not be someone acting in your best interests.
- Never make a decision based on phone calls, glossy brochures and pushy salespersons. Always seek independent advice from someone who is not associated with the “sales pitch”. If possible research the company.
- The golden rule. If you receive a cold-call, email or text, etc. regarding your pension, put the phone down and/or delete the message immediately.
Do not respond to callers trying to sell you investments. Simply hang up the telephone. Legitimate investment companies will never cold-call
Don’t let the company pressure you into buying because they say the offer won’t be there tomorrow. Hang up and take a day or two to consider your options
Exercise considerable caution when investing your money
Make sure you know exactly who are dealing with and always seek independent or legal advice before committing to any investment