Members of the public are more likely to alert authorities to illegal fly-tipping than to pitches from investment fraudsters, according to a new survey.
The research, conducted by Yougov on behalf of the Financial Conduct Authority (FCA), found that only 63% of over-55s would tell the authorities they’d been targeted by fraudsters pushing an investment scam.
By comparison, a significantly higher number of people would report a supermarket spillage (84%) or a fly-tipping offence (81%).
Victims unsure of how to report fraudsters
The new survey consulted more than 1,000 over-55s with incomes of at least £30,000 – which is the demographic that receives the highest number of approaches from fraudsters.
The FCA says the average fraud victim loses more than £32,000 on fraudulent investment schemes, which can range from land banking to wine investment.
Worryingly, the data shows that over a fifth (22%) of people who thought they’d been approached by scammers in the last three years failed to report it – even though the majority of people said they would speak with their partner (72%), a family member (69%) or a friend (59%) about the crime.
But this under-reporting may be due to lack of information rather than apathy – the most common reason people gave for staying quiet was not knowing who to file a report with.
How do investment fraud scams work?
Investment fraud scammers will typically contact you over the phone, using high-pressure sales tactics to convince you to invest in something that doesn’t exist.
If you fall victim to an investment scam, you might not realise until a long time after you were first approached.
To make the scam more convincing, fraudsters will often give ‘investors’ an early return on their initial investment, and then tell them to wait for further returns in the future.
FCA makes plea for victims to come forward
The watchdog says it receives 8,000 calls every year about financial scams, and has now has launched a campaign to encourage people to speak up when they suspect an investment scheme is fraudulent.
Mark Steward, FCA director of enforcement, says: ‘By reporting suspicious investment schemes, people are having a direct impact in helping to stop fraudsters exploiting others.’
‘We are encouraging people to speak out on behalf of their family or local community, just like they would report a crime in their local area.’
How to report an approach from a fraudster
Reporting a fraudulent sales pitch to the FCA can help identify new bogus firms, which are cropping up all the time.
- If you suspect you’ve been approached by a scammer, you check the FCA register to check the firm is legitimate and the warning list, which contains details of 4,000 fraudulent firms.
- You can report a suspected investment scam using the FCA Scam Smart tool or call its contact centre on 0800 111 6768.
- Finally, you can also report fraud or cyber crime to Action Fraud, which is run by the City of London police.