Lost money to a
Investment Scam?

How to spot Investment Fraud

1. 1

   You came across the person or advert on social media or through a cold call

   Whilst legitimate companies can advertise on social media, so can fraudsters. This is a common way for fraudsters to advertise their investment opportunities, usually with attractive returns. Advertisements will usually look professional and mirror those of legitimate companies.

2. 2

   You were encouraged to invest by “starting small” to test the investment

   Often with these scams you’ll be asked to put in as little as £200 or £250 to see how it performs. Miraculously, you’ll see your investment perform remarkably well which will be used to encourage you to invest more. The fraudster may even send you a little bit of your profit back to try and convince you that this is real. What you are seeing is unfortunately all fake. While it may all look real and appear to track real life events, fraudsters are able to create extremely convincing looking platforms that they can manipulate to back up whatever story they want to tell you. They will create whatever elaborate story they need to convince you to invest more - sometimes this will be crippling losses you need to “save”, sometimes it will be once in a lifetime opportunities to invest.

3. 3

   Unrealistic guaranteed returns

   Fraudsters commonly offer high guaranteed returns, which are backed by contracts or funding, so it seems there is ‘nothing to lose’. A good approach is to take a step back and consider, if what this person is telling you is true, why they would be telling you. Investments can be high risk, and it is generally very difficult to guarantee returns in a volatile market. In addition, high returns are easily manipulated and faked by fraudsters to show how well your investment is performing. This is a common tactic to persuade you to invest further.

4. 4

   Receiving returns initially

   It is a common tactic used by fraudsters to present a legitimate investment opportunity. You may think, “If I am receiving returns, it must be legitimate.” Caution! Fraudsters provide returns initially to tempt you into investing more and more. Eventually, once you have invested more and want to withdraw, fraudsters will use multiple excuses as to why you cannot or will ask for further ‘fees’ in order to withdraw. In some cases, the investment will collapse before you can withdraw your funds. At Refundee, we see this in most investment scams, and receiving returns should not be a sign of legitimacy.

5. 5

   Unregulated firms

   Important! Before investing, it is always important to check the firm's relevant regulatory status and whether they are authorized to conduct the activities they are advertising. Firms acting within financial services in the UK need to be regulated by the Financial Conduct Authority. You can search a company's name here on the FCA register to see if they are regulated. This will also show if there are any warnings about the company or clones of the legitimate firm. It is important to check the authorised firm details to ensure you are dealing with the legitimate company.

6. 6

   Claims of Government/local authority contracts

   As Refundee has recently observed in Social Housing Scams, fraudsters will claim that they have contracts backed by the government or legitimate authorities to gain trust and security with the investment offering. This is a common tactic used by fraudsters to add credibility to their claim of a ‘safe’ investment and can be linked to their justification of ‘guaranteed’ returns. In reality, the schemes are not government-backed, and investors are lured into investing, believing it is safe.

7. 7

   Pressure tactics

   You may see fraudsters pressuring you to invest more to capitalise on the opportunity for returns. They can use multiple reasons to persuade you to invest and may even pressure clients to take out loans to invest further. It is always good to step back and think before agreeing to invest. Fraudsters are very experienced in pressuring clients to invest on the spot and will push you to do so. No legitimate company would use pressure tactics to tempt you to invest more, so it is always good to think and talk to someone if this happens. Refundee can speak to you about red flags you may be experiencing with a firm.

   If you are experiencing any of the issues above, or concerned about your investment you can check if you’re eligible by, starting your claim.