Funding scams have conned virtually 100,000 folks into handing over £2.6bn to fraudsters since 2020, new analysis by the Pensions Administration Institute (PMI) has discovered.
Between January 2020 and December 2023, a median of £13m per week was stolen by criminals, with boiler room fraud and Ponzi schemes claiming the biggest totals. The figures imply victims misplaced £26,773 on common.
The PMI’s findings have come from information obtained by way of a Freedom of Information (FOI) request to the Metropolis of London Police – the UK’s premier anti-fraud company. The skilled physique for pension specialists has urged folks to observe FCA recommendation on how one can keep away from being scammed.
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IT comes after a sequence of fraud warnings in current months. In February, Motion Fraud – which is a part of the Metropolis of London Police drive – urged holidaymakers to be looking out after £12.3m was stolen by con artists in 2023. Final month, the crime squad reported there had been an eightfold improve within the incidences of recruitment scams.
PMI: ‘Funding scams declare £500m+ in 2023’
The info PMI has launched breaks down how many individuals fell sufferer to every kind of funding rip-off, and the way a lot was stolen, in every of the 4 years to December 2023.
IT discovered boiler room fraud – the place faux stockbrokers chilly name victims to attempt to persuade them to purchase shares or bonds in non-existent, or nugatory corporations – conned the most individuals and stole the very best amount of cash general. IT claimed £553m over the interval, with virtually 21,000 folks getting scammed.
Ponzi schemes got here second, with greater than 12,000 folks shedding £499m over the three years. Any such rip-off recruits folks handy over their cash to entry investments providing abnormally excessive income. Nonetheless, no funding is made, with early victims of the rip-off receiving the cash later traders have put in, till the scheme collapses.
Different types of rip-off the Metropolis of London Police recorded included:
- Fraud restoration schemes – defrauded individuals are focused by scammers providing to get them their a refund. These scams generated £163m from 10,000 victims.
- Pension liberation fraud – scammers search to steer you to entry your pension pot earlier than you flip 55, or to maneuver IT to an unregulated scheme. Any such rip-off claimed £19m from 1,500 folks.
- Timeshare and vacation membership fraud – fraudsters claiming to signify bona fide vacation house administration corporations contact house owners of timeshares to attempt to get them handy over their financial institution particulars. Any such crime generated £3m from 445 folks.
Different, much less frequent, kinds of fraud managed to con greater than 53,000 folks out of over £1.4bn.
2023 was a very unhealthy 12 months when it comes to the variety of folks being scammed. Total, 26,740 folks had £527m stolen from them – the equal of virtually £20,000 per sufferer. The worst 12 months in cash-terms was 2022, when a complete of £855m was stolen.
Reacting to the findings, PMI president Robert Wakefield stated: “Our analysis reveals {that a} surprising variety of individuals are falling sufferer to funding fraud. IT is regarding that yearly 1000’s of individuals are shedding tens of millions of kilos to monetary scams within the UK. The quantity and class of funding scams is ever-growing.
“By sustaining a wholesome dose of scepticism and coaching your self to identify some frequent pink flags, you might be able to defend your self and your family members from turning into victims. Rising the quantity of monetary schooling offered in colleges might additionally assist to make folks extra conscious of the dangers of funding scams.”
Frequent pink flags embrace a proposal that sounds too good to be true, and stress from somebody to behave shortly to make the most of the deal they’re providing. The FCA has compiled a list of scam warning signs for folks to look out for.
Metro Financial institution sees £4m+ in fraud to date in 2024
Metro Financial institution has additionally revealed the most typical kinds of rip-off IT is seeing. IT stated its prospects have misplaced £4m to date in 2024, with virtually one in 5 of the instances involving its enterprise or business prospects.
The scams IT has seen probably the most of are: fraudsters impersonating real funding corporations; cryptocurrency scams; and fraud involving worthwhile jewelry, gems or metals.
Its head of fraud and investigations, Baz Thompson, stated: “These are among the hardest and most refined scams to detect due to the big quantities of cash at stake.
“Traders have to be tremendous cautious as scammers will go to extraordinary lengths to steer, entice and defraud traders utilizing refined methods from faux web sites to posing as monetary advisers to create credible funding situations. We’d encourage anybody pondering of investing to first examine the FCA warning checklist earlier than beginning.”
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