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Investment Association warns of new scams targeting retail investors

Published: 06:00 14 Jul 2020 BST

Investment fraud

The Investment Association (IA) has warned that retail investors are facing new and sophisticated attempts by fraudsters to get them to invest in bogus investment products and disclose their personal details in the process.

In a report on Tuesday, the IA said investment managers have reported that organised criminal gangs are impersonating their products, particularly bonds, and promoting them through fraudulent price comparison sites and cloning brands with fake documents.

The gangs are also targeting potential victims through sponsored links on Facebook and Google. As well as using the names and addresses of staff at real investment management firms.

The estimated loss to savers is currently estimated at around £4mln, with around 300 incidences reported to date.

IA said reports of the scam had spiked around three months after the coronavirus lockdown, with many investors contacting firms to enquire about unreceived payments before realising they had been conned.

The IA said retail investors should be on the lookout for the details of any contacts offered to them, as well as any instances of cold calls. The body also said investors should be wary if they are placed under time pressure to part with their cash, a common fraud tactic.

“During this time of great uncertainty, serious organised criminals have ratcheted up their operations and are increasingly ruthless in their mission to steal from investors. Our industry is determined to counter this threat, and will continue to work closely with the police and regulators to bring an end to these scams”, said IA chief executive Chris Cummings.

“Fraud and scams come in many different disguises. That’s why today we urge savers and investors to be as vigilant as possible to protect their investments and think very carefully about the risks criminals pose to their financial wellbeing”, he added.

Steve Hyndman, director of financial crime risk at Aviva Investors and chair of the Investment Association financial crime committee, said: “Fraudsters will always try to take advantage of uncertainty. Fake comparison sites are a clever way to hook in savers, particularly during the uncertain times we are living through now. As with all types of fraudulent activity, we would urge members of the public to remain as vigilant as they can.”

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