Investment fraud is on the rise, particularly among young professionals who have been lured by ‘get rich quick’ schemes, leading to a substantial loss of over £890 million last year. The increase in fraudulent investment activities has been linked to the pervasive use of social media as a tool for criminals to disseminate bogus opportunities.
The National Fraud Intelligence Bureau reported a 49.5% rise in losses to investment fraud in the 2021/22 financial year, with an average loss of £34,043.41 per victim. According to Detective Chief Inspector Suzanne Ferris from the City of London Police, the prevalent economic challenges may increase the susceptibility of individuals to such fraud as they seek rapid financial solutions.
Young adults, aged between 20 to 39, are particularly at risk, comprising 39% of all victims. Fraudulent schemes are often promoted by influencers with large social followings, using endorsements to attract victims. These scams typically involve unauthorized push payments on counterfeit websites or the extraction of personal data through social engineering.
Cryptocurrency investments, especially in Bitcoin, have also seen a rise, often tied to these investment scams. To combat this, individuals are encouraged to research thoroughly before investing and to be wary of high-pressure tactics that demand immediate decisions. Other protective measures include verifying the legitimacy of investment offers, being cautious of requests to convert funds into cryptocurrency, and cross-referencing investment businesses with the Financial Conduct Authority’s authorized list.
The City of London Police, NFIB, and Action Fraud advocate for the public to adhere to the “Take Five to Stop Fraud” advice: Stop, Challenge, and Protect. They also advise immediately contacting banks and reporting to Action Fraud if one suspects being a victim of such scams.
In light of these concerns, the City of London Police is spearheading a national campaign to increase awareness of investment fraud and to help individuals recognize and prevent potential risks.
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