Find out how online trading scams work, how to avoid scams and what to do if you are scammed.
UK consumers are being increasingly targeted by investment scams carried out via online trading platforms where fraudsters offer trades in foreign exchange, contracts for difference and cryptoassets such as bitcoin.
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.
How online trading platform scams work
Investment scams using online trading platforms are often promoted online and via social media channels. Fraudsters typically promise high returns and use fake celebrity endorsements and images of luxury items to entice people to invest in their scams. The ads then link to professional-looking websites where consumers are persuaded to invest, either through a managed account where the firm makes trades on their behalf, or by trading themselves using the firm’s platform.
Most consumers report initially receiving some returns from the firm to give the impression that their trading has been a success. They will then be encouraged to invest more money or introduce a friend or family member to invest. However, eventually the returns stop, the customer’s account is suspended and there’s no further contact with the firm.
Many scam firms claim to be based in the UK and even claim to be FCA authorised.
How to protect yourself
- Be wary of adverts online and on social media promising high returns from investing online.
- Always be wary if you are contacted out of the blue, pressured to invest quickly or promised returns that sound too good to be true.
- Always do your own further research on the product you are considering and the firm you are considering investing with.
- Check the FCA register of authorised firms. If you use an unauthorised firm, you won’t have access to the Financial Ombudsman Service or Financial Services Compensation Scheme (FSCS), so you’re unlikely to get your money back if things go wrong. However, not all investments are regulated by the FCA. For example, we don’t regulate most cryptoassets, but we do regulate certain cryptoasset derivatives (such as futures contracts, CFDs and options). Read more about cryptoassets and forex scams.
- Check they are not a clone – a common scam is to pretend to be a genuine FCA-authorised firm (called a ‘clone firm’). Always use the contact details on our Register, not the details the firm gives you.
- Check the FCA Warning List – use our tool to check the risks of a potential pension or investment opportunity. You can also search to see if the firm is known to be operating without our authorisation.
- Check with Companies House to see if the firm is registered as a UK company and for directors' names. To see if others have posted any concerns, search online for the firm's name, directors' names and the product you are considering.
- Seriously consider getting independent 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.
If you have been scammed
If you have 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.
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.