People are being warned to watch out for investment scams as the City regulator has seen an increase in inquiries about such incidents.
Between April and September last year, the Financial Conduct Authority (FCA) received 16,400 inquires about possible scams - up nearly a third from the same period in 2020.
Crypto asset scams were among the top types of fraud reported, with some scammers also impersonating the regulator itself.
Boiler room scams were also common. These involve frauds being run out of offices, known as boiler rooms, with criminals contacting people out of the blue and convincing them to invest in schemes or products that are worthless or do not exist.
The FCA also said it is taking action in the consumer investment market and has stopped around one in four firms wanting to join from entering it.
Its ScamSmart campaign encourages those considering investing to check its dedicated website, which features an online tool and a warning list.
The FCA’s InvestSmart campaign launched in October, targeting consumers who are new to investing, aiming to provide them with information to make better-informed investment decisions.
Sarah Pritchard, executive director of markets at the FCA, said: “Consumers need to have confidence when making investment decisions and the data we’ve published today shows how prevalent scams can be.
“Before investing, check you know who you are really dealing with, check if they are authorised by the FCA and do your research to understand the risks that might be posed.”
The FCA has already taken action to improve the market, for example by banning the mass-marketing of speculative mini-bonds.
Susannah Streeter senior investment analyst at Hargreaves Lansdown, commented that the watchdog is swimming against an increasingly treacherous tide of scams and suspect investments.
“It seems there is still a woeful lack of knowledge about the tactics used by fraudsters and the watchdog is trying to beef up education through its ScamSmart campaign - but consumers aren’t just at risk of being targeted by criminals, the FCA is also concerned about the increasing number of adults who are increasing their holdings in high risk products without being aware that losing some money was potentially a hazard.
“It’s clear that education needs to be sharpened up pretty pronto - with so many vulnerable consumers being lured in, and it’s very welcome that crypto assets will soon fall under the FCA’s watch as part of new legislation.”
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