Find out how to protect yourself from investment scams, and how to check you’re dealing with an authorised firm.
Scams are increasingly sophisticated. Fraudsters can be articulate and financially knowledgeable, with credible websites, testimonials and materials that are hard to distinguish from the real thing.
But if it sounds too good to be true, it probably is.
We are aware that scammers are targeting consumers searching for investments online, in particular through search engines like Google and Bing. Although some scammers offer high returns to tempt you into investing, they may also offer realistic returns to make their offer appear more legitimate. Those offering or promoting products or investment opportunities found through search engines are not necessarily authorised or regulated by the FCA. You can check the FCA Warning List for firms to avoid.
Reject unexpected offers
If you’re contacted out of the blue about an investment opportunity, chances are it’s a high-risk investment or a scam.
Scammers usually cold-call but contact can also come by email, post, word of mouth or at a seminar or exhibition. Scams are often advertised online too.
If you get cold-called, the safest thing to do is to hang up. If you get unexpected offers by email or text, it’s best to simply ignore them.
Callers may pretend they aren’t cold calling you by referring to a brochure or an email they sent you – that’s why it’s important you know how to spot the other warning signs.
Spot the warning signs
- Unexpected contact – traditionally scammers cold-call but contact can also come from online sources e.g. email or social media, post, word of mouth or even in person at a seminar or exhibition.
- Time pressure – they might offer you a bonus or discount if you invest before a set date or say the opportunity is only available for a short period.
- Social proof – they may share fake reviews and claim other clients have invested or want in on the deal.
- Unrealistic returns – fraudsters often promise tempting returns that sound too good to be true, such as much better interest rates than elsewhere. However, scammers may also offer realistic returns in order to seem more legitimate.
- False authority - using convincing literature and websites, claiming to be regulated, speaking with authority on investment products.
- Flattery – building a friendship with you to lull you into a false sense of security.
- Remote access – scammers may pretend to help you and ask you to download software or an app so they can access to your device. This could enable them to access your bank account or make payments using your card.
Check if a firm is FCA-authorised
Almost all financial services firms must be authorised by us – if they’re not, it’s probably a scam.
Check our Financial Services Register to see if a firm or individual is authorised or registered with us.
Always access the Register from our website, rather than through links in emails or on the website of a firm offering you an investment.
Check if the firm’s ‘firm reference number’ (FRN) and contact details are the same as on our Register.
If there are no contact details on the Register or if the firm claims they’re out of date, call our Consumer Helpline on 0800 111 6768.
If you’re dealing with an overseas firm, you should check with the regulator in that country and also check the scam warnings from foreign regulators.
If you use an unauthorised firm, you won’t have access to the Financial Ombudsman Service or Financial Services Compensation Scheme (FSCS) if things go wrong – and you’re unlikely to get your money back.
If you use an authorised firm, access to the Financial Ombudsman Service and FSCS protection will depend on the investment you are making and the service the firm is providing.
Not all investments are regulated by us (eg wine) – find out more about unregulated investment products.
Check it’s not a ‘clone firm’
A common scam is to pretend to be a genuine firm (called a ‘clone firm’).
Always use the contact details on our Register, not the details the firm gives you.
You should also check the firm’s details with directory enquiries or Companies House to make sure they’re the same.
Check the FCA Warning List
Use the FCA Warning List to check the risks of a potential investment – you can also search to see if the firm is known to be operating without our authorisation.
Even if a firm isn’t on our list, it may still be a scam – firms change names and details all the time.
Get impartial advice
You should seriously consider seeking financial advice or guidance before investing. You should make sure that any firm you deal with is regulated by us and never take investment advice from the company that contacted you, as this may be part of the scam.
The Money Advice Service has information on investing and about how to find a financial adviser. Alternatively, you could get further information from a group that represents advisers such as PIMFA.
Read more about how to find an adviser.
If you’re suspicious, report it
If you’ve given your bank account details to a firm you think may be operating a scam, tell your bank immediately.
If you've agreed to transfer your pension and now suspect a scam, contact your pension provider straight away. They may be able to stop a transfer that hasn't taken place yet.
Be wary of future scams
If you’ve already invested in a scam, fraudsters are likely to target you again or sell your details to other criminals.
The follow-up scam may be completely separate or related to the previous fraud, such as an offer to get your money back or to buy back the investment after you pay a fee.
If you have any concerns at all about a potential scam, contact us immediately.