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Overconfident UK investors fall prey to £1.2bn of fraud

A national campaign launched today warns UK investors they risk falling victim to thousands of pounds worth of fraud if they fail to take simple steps to check who they’re investing with.

Risky Man

The campaign, led by Action Fraud, the national fraud and internet crime reporting centre estimates that £1.2 billion is lost nationally to investment fraud every year.*

Figures collected as part of the nationwide campaign show that almost half (49%) of the men surveyed aged 36+ (a group most likely to have made investments*), admit to having given out personal details before checking the credentials of the person who contacted them and only 57% think they can tell frauds from genuine offers.

As part of a national call to action, entitled The Devil’s in Their Details, government and the private sector have come together to advise investors of the steps they can take to identify and avoid these scams. Action Fraud has teamed up with industry bodies including Financial Fraud Action UK (FFA UK), representing the banks and wider financial services sector, and regulators including the Financial Services Authority (FSA) to raise awareness amongst those at greatest risk of falling victim to fraud.

The campaign also features an online video created to provide a vivid illustration highlighting the risk a person faces if they don’t check before they invest.

Demonstrating the extent of under-reporting, Action Fraud has received reports of £15.5million* of money lost to investment fraud during the last six months. However, according to the FSA, only an estimated 10% of these investment crimes are reported*, with victims often failing to overcome a sense of shame and stigma before making a report, and the actual number and amounts lost are much higher.

Peter Wilson, Director at the National Fraud Authority who runs Action Fraud comments: “Some of the biggest personal fraud losses reported to police are from investors, a group that we think of as savvy and entrepreneurial.

Our intelligence shows that amounts ranging between £10K to over £1m are being handed over to fraudsters by victims. This loss is likely to be permanent and will not only deal a life-changing blow to the victims, but possibly their family and their business. Before investing large sums of money everyone should take a step back and consider if it sounds too good to be true, it probably is. The Action Fraud website contains simple steps people can take to prevent them from losing hard earned money.“

A victim of fraud, who lost over £1.5million to an investment scam and wishes to remain anonymous, said: “When a high-flying son of a family friend approached us about investing in a group of companies he was involved in we had no reason not to trust him. We invested a small amount of money first and were regularly updated on how our money was growing – and were even able to take some money back out of the company; all increasing the authenticity and resulting in us continuing to invest”.

“When we tried to take all of our money out, we were fobbed off with excuses. I grew increasingly ill with the stress and the fear of losing the family home. My doctor advised me to take some time to get better before confronting my money situation. A year later, one of the companies in this group no longer existed – the directors had apparently all moved on – that’s when I reported it to Action Fraud”.

“In total I lost over £1.5 million to this scam and I’m still trying to recover this – I would urge other people to report as soon as they have a suspicion that their investment isn’t for real – the sooner they do the sooner the police can work towards making sure it doesn’t happen to anyone else.”

Despite notionally being the most confident and assertive of demographics, background research for the campaign shows that men aged between 36-55 are one of the most likely age group to lose money to fraud, due almost entirely to this form of scam*. The findings have highlighted this group is more likely to take risks through taking part in online deals, promotions and foreign money-making opportunities. They demonstrate that the ability to invest large amounts, as well as a tendency to act on impulse serve to increase the likelihood of these people becoming victims of these scams.

Detective Superintendent David Clark, Head of the National Fraud Intelligence Bureau, said: “Fraudsters are clever: they tailor their techniques according to who they are targeting and will exploit financial acumen that investors believe they possess. Fraudsters will deliberately skim over vital details and use pressure tactics designed to force investors into making quick decisions. Real investments don’t work like that. Never be rushed into an offer and always be wary of anyone trying to push you into a deal, promising exaggerated or out of the ordinary returns. If you don’t check details when investing, you’re taking too big a risk.”

For advice or to report a fraud call Action Fraud on 0300 123 2040 to speak to a trained advisor or report fraud online.

- Ends –

For more information please contact Jessica Becker or Mea Perkins at The Red Consultancy:

[email protected] / 0207 025 6427.

[email protected] / 0207 025 6545.

Notes to editors

• The National Fraud Authority is the government agency that helps co-ordinate the fight against fraud in the UK. An integral part of this work is running the service, Action Fraud, the national reporting centre for fraud and internet crime. Members of the public, the police, businesses and charities can report to Action Fraud online or on the phone. Visit or call the contact centre on 0300 123 2040.

• Action Fraud works with partners in law enforcement - the National Fraud Intelligence Bureau, run by the City of London Police - to make sure fraud reports reach the right place.

• Action Fraud will be working with the following organisations throughout the campaign:

• Financial Fraud Action UK (FFAUK) ( – is the umbrella under which the financial services industry co-ordinates its activity on fraud prevention, presenting a united front against financial fraud and its effects. FFAUK works in partnership with The UK Cards Association on industry initiatives to prevent fraud on credit and debit cards, with the Fraud Control Steering Group (an unincorporated association of financial institutions who participate in retail banking and the payments market in the UK) on non-card fraud matters and the Cheque and Credit Clearing Company on credit clearing and cheque fraud.

• Financial Services Authority (FSA) ( - The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; securing the appropriate degree of protection for consumers; fighting financial crime; and contributing to the protection and enhancement of the stability of the UK financial system. The FSA will be replaced by the Financial Conduct Authority and Prudential Regulation Authority in 2013. The Financial Services Bill currently undergoing parliamentary scrutiny is expected to receive Royal Assent in late 2012 or early 2013, subject to the parliamentary timetable.

* The National Fraud Segmentation is a compendium of fraud loss indicators drawn together to illustrate the scale, prevalence and cost of fraud. A copy of the indicator is available here

* The average victim of an investment scam suffers a permanent, personal loss £20,000

* The National Fraud Segmentation is a compendium of fraud loss indicators drawn together to illustrate the scale, prevalence and cost of fraud. A copy of the indicator is available here

* Research carried out by Ipsos MORI on 500 British men aged 36+ between 26th and 31st October 2012

* The National Fraud Segmentation research, 2011, recognised that self-protection is essential to avoiding becoming a victim of fraud and that a targeted approach to developing the public’s ability to achieve this was required. A copy of the research is available here

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