What is an Investment Scam?

In an investment scam, fraudsters promise fictitious or high-yield investment projects to lure you into handing over money or cryptocurrency. These scams often masquerade as legitimate investment opportunities, involving a variety of areas such as cryptocurrency trading, stocks, wine, or art investments. Investment scammers use deceptive tactics, fake celebrity endorsements, fake websites, and cloned platforms to make their scams appear legitimate.

Investment scams are one of the most difficult types of app-based scams to detect and avoid. Unfortunately, it is also one of the most destructive types of scams. An average of nearly 8.000 such cases are reported annually in the UK, resulting in losses exceeding £144 million in 2024 alone – and this trend is expected to continue.

How to Identify an Investment Scam

Scammers can be very cunning, but look for the following signs:

They will proactively contact you: Legitimate investment companies will not suddenly call or message you. Be wary if someone contacts you via social media or email and promises quick returns.

They will pressure you to act quickly: Investment scammers may set deadlines or offer special rewards to force you to make a decision. Legitimate companies will give you time to research your options before investing.

They will use fake investment websites: Scammers often copy legitimate platforms or create fake websites to build credibility. Always check that the website is legitimate and authorized by the Financial Conduct Authority (FCA).

These promises sound too good to be true: Promises of high returns and zero risk are a clear warning sign. Real investments are risky, and no one can guarantee high returns. Investments can be low-risk or high-return, but rarely both.

They are not registered with the FCA: All reputable financial companies in the UK must be authorized by the FCA. You can check their authorization information online. Never invest with an unregistered company.

Common Types of Investment Scams

Cryptocurrency Investment Scams

These scams specifically target people interested in cryptocurrencies such as Bitcoin or Ethereum. Scammers claim to offer safe and high-yield cryptocurrency investments, but usually steal your funds or assets through fake exchanges or wallets.

Binary Options Scams in the UK

Binary options are a trading scam where fraudsters promise easy profits by betting on price movements. These scams are often operated by unlicensed brokers, making it difficult for victims to recover their losses.

Foreign Exchange Scams in the UK

Foreign exchange scams promise risk-free forex trading. Scammers may impersonate brokers or use fake websites to trick victims into handing over large sums of money.

Cloned Website Scams

Technically skilled scammers copy legitimate websites, tricking victims into revealing confidential information or making payments. In many cases, these cloned websites look exactly like legitimate platforms and have very similar functions.

Fine Wine or Whisky Scams

Criminals lure people into investing in unregulated, often counterfeit, fine wines or whiskies. This type of scam is increasingly rampant and can result in huge financial losses.

Land or Property Scams

In land or property investment scams, criminals typically promise high returns on property investments. These scams may exaggerate property values, make false development promises, or pretend to offer or showcase non-existent properties.

Pension Scams

In pension scams, people are tricked into handing over their retirement savings. Scammers promise high returns and security in exchange for access to their retirement funds. These scammers exploit retirees' desire for financial stability in their old age.