As part of its ScamSmart campaign, the Financial Conduct Authority (FCA) has lifted the lid on some of the commonest tactics investment fraudsters use to deceive those they target over the age of 55.
According to the financial watchdog's latest research, barely two-fifths (42%) of that age group reckon they know how to spot an investment scam.
The FCA said one of the most popular methods used by fraudsters is to pressurise potential victims to make a quick decision on the investment ‘opportunity'.
The regulator found more than half (53%) of over-55s believed acting quickly can be essential to obtaining a good deal, which it said demonstrates just how vulnerable people can be to the tactic.
Investment fraud victims do not get off lightly either, losing £32,000 on average, according to figures from Action Fraud released last October.
According to the FCA, the five most common tactics fraudsters use are:
* Offering lucrative returns above the market rate and downplaying the risks of the investment.
* Using flattery to make potential victims feel good, such as praising them for being a knowledgeable investor.
* Saying the deal is only available to the target and asking them to keep it a secret.
* Claiming other clients have invested or 'want in' on the deal - a technique known as ‘social proof'
* Putting them under pressure to invest in a time-limited offer.
'Put the phone down'
Apprentice and Countdown celebrity Nick Hewer, who is an active supporter of the campaign, advised investors to "just put the phone down" if they receive a cold call.
"As someone who has been approached by scammers myself, I know how hard it is to identify whether an investment offer is legitimate," he said.
"They're very clever, these people, playing psychological games to win over the trust of often vulnerable victims and that is why I'm working with the FCA to raise awareness of this troubling issue."
The FCA offered three pointers to help people to avoid becoming a victim of investment fraud:
* Reject unsolicited contact about investments
* Before investing, check the FCA Register to see if the firm or individual you are dealing with is authorised and check the FCA Warning List of firms to avoid
* Obtain impartial advice before investing
The regulator recently revealed it had opened 521 enquiries into unauthorised firms between 1 December 2015 and 30 November 2016 - subsequently opening 16 full investigations over the 12-month period. It also said it had received 11,650 enquiries relating to scams from consumers in that time.
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