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10 Ways To Spot An Investment Scam And Protect Your Assets

Have you ever been tempted to invest your hard-earned cash in an offer that seemed too good to be true? You made a wise choice if you decided against it!

Have you ever been tempted to invest your hard-earned cash in an offer that seemed too good to be true? You made a wise choice if you decided against it! 

The Office of National Statistics recently released data showing a 42% increase in investment fraud offences in England and Wales between January and September 2021. In the first half of last year alone, those offences totalled more than £107 million.

Financial fraud is significantly higher than it should be. If you are an investor with us, you can rest assured that your money is in safe hands.

10 ways to spot an investment scam

If you are presented with any of the following scenarios, resist the temptation to invest:

  1. A cold call or request from an unknown person to make a direct bank transfer to a personal account; there is no reason for this to happen in a legitimate investment opportunity.
  2. Invitation to click a link and enter your details on a third-party website: I was once asked to enter my debit card pin code (I didn’t).
  3. Investment opportunities that guarantee a high return: I have seen online adverts promising an 8% guaranteed return on investment. If it existed, we’d all be doing it! It’s a scam; anything that offers more than 1% guaranteed interest per year is untenable.
  4. Unregulated: reject any offer that is not regulated by the Financial Conduct Authority (FCA). The Financial Services Compensation Scheme (FSCS) provides compensation when certain firms providing authorised financial services are unable to meet claims against them. It helps to protect consumers and ensure confidence in the financial services industry.
  5. Requests for extraordinary amounts of personal details: always question who they are and why they need that information.
  6. Downplay risk: if the caller dismisses any potential risk, steer clear.
  7. High-pressure demands that require speed. This is designed to make you react quickly without thinking; there’s no need to work to anyone else’s timescale.
  8. A one-time-only offer: if you’re told that an opportunity is only being made available to you or only available this one time, walk away.
  9. Pressing your emotional buttons: avoid any invitation to invest that tugs on your heart strings (check out this earlier blog on How To See The Hidden Dangers Of Emotions And Ethics In Investing).
  10.  Social media posts are not a reliable source of advice for investments. Avoid them.

 What if  your intuition is telling you something is “off”, but you can’t quite put your finger on the reason?

 How to protect your money 

Here are some ways to help you protect your cash:

  • Stop any unsolicited conversation and take time to think about what’s being proposed.
  • Challenge what you’re being told: a legitimate caller will not rush or try to panic you.
  • Due diligence: do your research. If you are talking to someone who seems “dodgy”, check if their “company” is listed on the FCA register.
  • Use the  FCA Warning List to check out investment opportunities.
  • Be alert to the fact that overseas companies might not be regulated in the same way as those in the UK.
  • Send a cheque when making payments: it is still the most secure way to send your money (they will even bounce if the date or amount is written incorrectly).
  • Security checks: whenever our clients want to withdraw money from their account, we have checks in place to make sure it is them and that the bank account they are asking us to transfer to is one that we have used with them before (to send or receive money).
  • Reject cold calls: the safest thing to do is disconnect the call without giving them any information.
  • Talk to us if you’re a client with Applewood Independent.

 Investment scams are becoming more sophisticated and advanced, but with the right awareness, you can avoid becoming a victim.

For example, within the past few years, we have had to contact two of our clients because we recognised that their email addresses had been compromised and the fraudster had emailed us and requested money be drawn down. We have security measures in place to prevent this type of fraud from happening, and they’ve worked both times.

I hope you’ve found this article a valuable tool to help you protect your hard-earned cash! If you’re looking to invest in a safe and secure way and would like to make the most of our expertise, experience and connections, please get in touch or email me at ​​

P.S. If you have been targeted by an investment scam, report it to your local police station and to Action Fraud.

The views expressed in this article are those of the author and do not constitute financial advice. Applewood Independent Ltd is authorised and regulated by the Financial Conduct Authority. For financial advice designed for you and your specific circumstances, please contact the author using the contact details provided in this article or, alternatively, contact the Applewood Independent Ltd office on 01270 626555.

The value of your investment can go down as well as up, and you may not get back the full amount invested.

Past performance is not a guide to future performance.