To add to the challenges we all face due to the rise in the cost of living, the Financial Ombudsman Service (FOS) is warning people not to be tempted to invest in schemes that promise large returns but turn out to be fake1.
We are all looking at ways to increase our ability to cope and it is no surprise that we will look at any way we can to make our savings stretch further. The sad fact is that if an investment looks too good to be true, it probably is. FOS says that many of the investment scam complaints they investigate involve cryptocurrency1.
The way these scams often work is when people are persuaded to buy cryptocurrency and send money to what they believe is a genuine investment platform that is in fact operated by fraudsters. According to FOS, there are examples of consumers being defrauded out of sums up to hundreds of thousands of pounds1.
The report from FOS concentrates on money being invested in the belief that it is going into cryptocurrency but is just diverted into the pockets of the fraudsters.
Crucially, fraudsters have always relied on the promise of great returns and large profits. It is hardly surprising that many of us, keen to extract the maximum return from the money we have saved, are likely to be tempted by offers like this. The key is to make sure that, no matter how plausible the proposition looks, it is checked thoroughly before any money is transferred.
Nausicaa Delfas, interim chief executive and chief ombudsman at the FOS said, “We are concerned that, in current economic circumstances, people could be tempted to invest in fake investments.
Our advice to consumers is to be wary, conduct their own research, check the FCA register (of authorised intermediaries) and contact the firm directly on the number listed.”
She added, “If people feel they have been treated unfairly by their bank, they should contact the Financial Ombudsman Service, and we will see whether we can help.”1
Sources
- Financial Ombudsmen Service (2022) Consumers warned about rise in investment scams. Available at: https://www.financial-ombudsman.org.uk/news-events/consumers-warned-about-rise-in-investment-scams (Accessed 21 October 2022)
All the information in this article is correct as of the publish date 27 October 2022. The opinions expressed in this publication are those of the authors. The information provided in this article, including text, graphics and images does not, and is not intended to, substitute advice; instead, all information, content and materials available in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information.
