FCA urges public to report and speak out against fraudulent investment schemes

  • More than a fifth (22%) of those contacted by a suspected fraudulent investment firm stay silent  
  • Brits are more likely to report fly-tipping (81%) than investment scams (63%)
  • Londoners report the most investment scams to the FCA followed by people from Birmingham and Belfast

The Financial Conduct Authority (FCA) is today urging the public to get in touch if they have been contacted by a company offering what they think could be a fraudulent investment. This plea comes as new research shows more than a fifth (22%) of over 55s surveyed  who suspect they have been contacted about a fraudulent investment in the last three years, did not tell anyone about it. The most common reason given for not reporting was not knowing who to report to (49%).

Encouragingly, 63% say they would report a suspected investment scam to an organisation*. However, this is significantly lower than those who would report spilled liquids in a supermarket (84%) or fly tipping in their local area (81%). 

Interestingly, of those who said they would tell someone if they believed they had been offered a fraudulent investment, almost three quarters (72%) said they would speak with their partner, and a similar proportion would tell a family member (69%) or a friend (59%).

Last year the FCA received over 8,000** reports of potential scams, with Londoners reporting the highest number of complaints, followed by those from Birmingham, Belfast and Guildford***. This supports the findings from the research, which shows that Londoners (42%) are the most likely to report suspected investment scams to the FCA, compared to other regions.

Reports to the FCA help to inform action to protect consumers from firms operating fraudulent schemes. The regulator publishes warnings about potentially fraudulent firms which are added to the FCA Warning List, an online tool that helps investors check a list of firms operating without authorisation and find out more about the risks associated with an investment. This list currently contains details of nearly 4,000 firms to avoid. The FCA also takes civil court action to stop illegal activity and for the most serious cases, pursues criminal prosecution. Last year, the FCA returned over £3 million to victims of unauthorised activity, including investment fraud. 

In light of this new research, the FCA is calling for more consumers to report suspected investment scams and join the growing number of people speaking out against fraudsters, recognising that there are more bogus firms out there that are yet to be identified.

Mark Steward, Director of Enforcement, FCA, comments:

“We want to say thank you to everyone who is coming forward to help us crack down on investment scams. It’s clear to see that by reporting suspicious investment schemes to the FCA, people are having a direct impact in helping to stop fraudsters exploiting others. But there is still more we can all do and we need the public’s help.

We are encouraging people to speak out on behalf of their family or local community, just like they would report a crime in their local area.”

Nick Hewer, who is supporting the campaign, added:

“As someone who has been approached by scammers myself, I know that it’s not always easy to distinguish between a real and a fake investment offer. It’s vital that more people speak out to get these schemes closed for good.

“Remember, if it sounds too good to be true, then it probably is. If you are offered an attractive investment out of the blue, be suspicious, check the FCA’s Warning List and seek impartial advice. Better still, if you get a cold call, just put the phone down!”

To avoid being a victim of investment fraud, the FCA advises consumers to, at the very least:

  1. Reject unsolicited contact about investments.
  2. 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.
  3. Get impartial advice before investing.

Suspected investment scams can be reported to the FCA at www.fca.org.uk/scamsmart or via its contact centre on 0800 111 6768.

ScamSmart Cities - Top 10 areas of the UK for reporting suspected investment scams***

  1. London
  2. Birmingham
  3. Belfast
  4. Guildford
  5. Brighton
  6. Chelmsford
  7. Redhill
  8. Sheffield
  9. Joint 9th = Norwich, Reading

Notes to editors

  1. *E.g. the Police, bank, Citizens Advice, Trading Standards etc. 
  2. **Source: FCA data.
  3. ***Amongst reports made to the FCA Contact Centre.
  4. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 1006 adults. Fieldwork was undertaken between 18th - 24th September 2017. The survey was carried out online.
  5. From April 2016 to March 2017, the FCA received 319,594 visitors to the ScamSmart website and 26,091 users checked an investment on the FCA Warning List.
  6. Figures relating to the number of calls that have been made to the FCA are directly from the FCA call centre.
  7. On 1 April 2013, the FCA became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
  8. The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.