New figures show more than £5.6m was lost to investment fraud by people in South Wales last year.
Investment fraud is when criminals approach individuals, often out of the blue, and persuade them to invest in schemes or products that are either worthless or entirely fictitious. Fraudsters may claim to offer opportunities in foreign exchange, gold and other valuable metals, overseas time-shares, or cryptocurrency – promising unrealistically high returns far exceeding normal market trends.
In 2024, Action Fraud received 25,843 reports related to investment fraud, with victims collectively losing £649m. A total of 300 such reports were received from people in South Wales, with a total loss of £5,605,119.
Cryptocurrency was the most common asset fraudsters claimed to be investing in, accounting for 66% of all reports.
Detective Superintendent Oliver Little, from the City of London Police, said:
“It may seem obvious, but we would really emphasise the age-old ‘if it is too good to be true it almost certainly is’ mantra.
“Investment fraudsters will often be incredibly skilled in what they do and will spin a convincing and alluring pitch of how much money they can make you, in often a short amount of time. Do not be seduced by the promise of making “easy money” as the world of stocks and shares is anything but.
“Whether it’s £200 or £200,0000, our advice is always the same – do your research independently, check if the company is FCA-registered and never take financial advice via social media or from people who have approached you out of the blue. If it were that easy to make profit on an investment, we would all know about it.”
Social media remained a key tool for the increasingly sophisticated fraudsters, with police warning about scammers getting in touch via social media or messaging platforms, claiming to be an investor or trader and boasting of guaranteed high returns.
The data also shows fraudsters often impersonate public figures to try to build credibility, with Money Saving Expert Martin Lewis the most used false identity. More than two thirds of cases where Lewis – a frequent face on daytime TV – was impersonated targeted those aged 60 and above. X owner Elon Musk and TV personality Jeremy Clarkson were also frequently impersonated.
As always, if an investment opportunity seems too good to be true, it almost certainly is.
As a general guideline, legitimate investments in the FTSE 100 typically yield annual returns of 4-5.5%. Anyone promising guaranteed returns of 10%, 12% or even 20% should be treated with extreme caution – such claims fall well outside standard market expectations.
What to look out for:
- Being approached via social media: if you’re approached, out of the blue, by someone telling you they can make you guaranteed returns on an investment, block the number and don’t respond. On WhatsApp, press and hold the message bubble, select ‘Report’, then follow the instructions.
- Investment opportunities mentioning cryptocurrency, trading, or stocks and shares: these significantly outweigh traditional investment in commodities such as energy, precious metals, alcohol or foreign exchange.
- An advert using well-known celebrities: millions was lost to investment fraudsters using celebrity identities such as Martin Lewis, including through AI images and videos.
How to protect yourself from investment fraud:
- Investment opportunities: don’t be rushed into making an investment. Legitimate organisations will never pressure you into investing on the spot.
- Seek advice first: before making significant financial decisions, speak to trusted loved ones or seek professional independent advice.
- FCA register: use the Financial Conduct Authority’s (FCA) register to check if they regulate the company. If you deal with an unregistered firm or individual, you may not be covered by the Financial Ombudsman Service if you lose your money.
More information on investing safely: https://www.fca.org.uk/scamsmart
If you’re a victim of investment fraud:
- You could be targeted again: fraudsters sometimes re-establish contact with previous victims, claiming they can help them recover lost money. This is a secondary scam. Hang up on any callers claiming they can get your money back.
- Identity theft: if you suspect your identity may have been stolen, you can easily check your credit rating online. You should do this every few months anyway, using a reputable service provider and follow up on any unexpected or suspicious results.
- Legal advice: there may be civil litigation options for deceit and/or breach of contract. Seek professional legal advice or contact Citizens Advice to understand your options.
You can also contact the FCA’s consumer helpline on 0800 111 6768 or report suspicious businesses or individuals on the FCA’s website reporting form.
If you’ve been a victim of fraud or cybercrime, report it at www.actionfraud.police.uk or on 0300 123 2040.
Find out how to protect yourself from fraud: https://stopthinkfraud.campaign.gov.uk
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