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Written by: Sarah Coles | Hargreaves Lansdown
Investment scams are on the march, as fraudsters see the opportunity to fleece their victims of thousands of pounds. While the number of cases actually fell almost a quarter in 2024, losses rose by over a third – the first increase since 2021.
So how can you spot investment scams and protect yourself, and what should you do if you’ve been scammed?
Investment scams are evolving – what you need to look out for
Investment scams essentially involve the victim being convinced to hand their money over, in the belief it will be invested in a clever scheme to make them rich without risk.
However, they come in a number of guises and fraudsters are getting more creative.
Criminals can use any asset to draw people in – including gold, property, cryptocurrency, carbon credits, land banks, wine, or lesser-known shares.
In reality these investments aren’t what they seem.
Some are worthless, some are enormously risky, and some never existed at all.
There are several scam techniques that have been around for years.
You might be approached by phone and put under pressure to act fast or miss out. You could also be told to keep the investment a secret. These investments are either not what they seem, or they don’t exist at all.
And in some cases, criminals will still use letters to start the scam.
However, other approaches are developing with technology.
Investment scams are increasingly moving online, where more than half of scams now start. And to make matters worse, criminals are using even more sophisticated approaches, including the emergence of deepfakes – these are videos that have been digitally altered to appear to be someone else.
Social media is one of the main ways to draw victims in.
Some videos will show luxury lifestyles, and encourage people to sign up to a WhatsApp group where they’ll apparently learn the secrets of investing success.
Another horrible twist on this is using deepfakes of well-known people in the industry, including Peter Hargreaves, to get people to sign up to scam WhatsApp groups.
These are likely to be ‘pump and dump’ schemes, in which the criminals invest in very small stocks, then they put people under pressure to invest too – in order to push the price up. Once the value has risen, the criminals sell up and run, leaving investors with big losses, and in some cases with worthless stocks.
What are HL doing to help you?
Like other investment companies, HL is proactively identifying scams using its name, contacting social media companies to take them down.
We’ve been able to take down paidadverts using the HL and Hargreaves Lansdown images or brand terms – over 600 adverts and 22 pages from scam accounts have been taken down, following HL reporting them for trademark infringement.
However, so-called fan pages are more difficult to tackle.
We have yet to successfully get one of these pages taken down – they’re able to advertise despite not being a genuine person.
We’d like to see social media companies making it easier for companies to protect users by preventing fraudsters from duping people into believing they’re dealing with a genuine and reputable company.
What can you do to protect yourself from investment scams?
It pays to be alert to the risks, and understand the tricks scammers use.
It’s worth knowing that neither of the HL founders are on social media – not Peter Hargreaves or Stephen Lansdown. They don’t have WhatsApp groups – and neither does HL.
If you’re enticed to sign up to these, they are scams.
The criminals will use your details to put you under pressure to buy assets that either don’t exist, or are designed to make the criminal rich.
If in doubt, it’s always better to err on the side of caution, and assume something is a scam.
If you’re approached out of the blue by someone offering you an investment, it should ring alarm bells. If you’re put under pressure or told to keep quiet about an investment, that’s a surefire sign of a scam.
Be alert to things that seem too good to be true. If someone says they have the secret of investment, or are offering sky-high returns without risk, these are both huge warning signs.
What should you do if you think you’ve been scammed?
If you’ve been the victim of a scam, report it to the police via 101 and make a report on the Action Fraud website, so they’re aware of the threat.
Contact your bank’s fraud department too.
Let them know if you’ve shared any account details or card numbers, so they can protect your account.
If you have disclosed any passwords, change them as soon as possible.
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