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Investment fraud

What it is

When you get a cold call from someone pretending to offer you the opportunity to invest in a variety of schemes or products that are either worthless or don’t even exist.

It’s also known as share sale fraud, hedge fund fraud, land banking fraud or bond fraud.

The majority of investment frauds are run out of offices known as boiler rooms.

Protect yourself

  • Never take up offers of investments on the spot from cold calls. To make safe investments, take a look at the Financial Conduct Authority’s ScamSmart warning list.
  • Don’t give your bank account details or sensitive information.
  • Boiler rooms tend to target people over 65. Talk to elder family members and vulnerable people you care for to make sure they know how to spot bogus investments.

Take a look at our ‘Beat The Boiler Rooms’ campaign to find out more.

Spot the signs

  • You’re contacted out of the blue with the investment offer.
  • You’re shown glossy brochures, professional-looking websites and certificates that make them look authentic.
  • You’re pressured into making rushed decisions with no time to consider the nature of the investment.

How it happens

You’re called by a professional-sounding broker who offers you investment opportunities that offer incredible potential for making profit. They usually offer to sell you shares or bonds, but may also offer other investments such as precious metals such as gold, silver or diamond, or wine, art or energy.

You’re also promised free research reports, special discounts and ‘secret’ stock tips. They’ll tell you how your investment has progressed and give you the chance to invest in more of the same products or stock in using a variety of schemes to make the venture sound credible.

They usually hire out prestigious city offices, offering websites and literatures and send you official-looking documents to make their enterprise look legitimate.

In reality, the fraudsters are cold calling as many people as possible to pay for bogus investments. Once the fraudsters have made you invest as much money as possible, they quickly disappear just before you’d expect to get the extra money you made from your investment.

 

The resources they offer don’t exist, or they haven’t told you that your investment is worthless. For example, they’ll sell land that has no potential for development, or rare stones that aren’t worth as much as they sound.

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You may be told to keep your investment secret to ensure you receive maximum returns, but really the boiler rooms want to prevent you from telling others to avoid being spotted.

How to report it

Boiler rooms have been known to harass victims who have reported them, so don’t feel like you’re at fault report it to Action Fraud or call them on 0333 123 2040

If Fraud has been committed report it to Action Fraud. For more advice and to raise any concerns, contact the Office of the Public Guardian.

Source - Action Fraud

Date Published: Jul 21, 2018

Types of fraud

A-Z of fraud

To help understand which fraud you've been affected by, we've categorised them into an alphabetical list.

What is fraud and cyber crime?

Fraud is when trickery is used to gain a dishonest advantage, which is often financial, over another person.

Advance fee fraud

Advance fee fraud is when fraudsters target victims to make advance or upfront payments for goods, services and/or financial gains that do not materialise.

Corporate fraud

Corporate fraud can be any fraud committed against a business.

Individual fraud

Individual fraud could be any fraud that targets a person directly. Individual frauds can differ from frauds affecting businesses and other organisations.

Online fraud

Some fraudsters rely on the internet to commit their crimes. Learn about some different types of internet frauds that and how to protect yourself and get safe online.

Identity fraud and identity theft

Identity theft is when your personal details are stolen and identity fraud is when those details are used to commit fraud.
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