Fraudsters have raked in around £4m in by ‘cloning’ existing investment products, and persuading investors to buy them.
The Investment Association has seen 300 incidences of this fraud to date. It warned these are increasingly are new, sophisticated and large-scale scams — where investors are persuaded to purchase bogus investments and disclose personal information.
A number of investment managers have reported that fake version of their products are being promoted through scam comparison websites.
The IA said brands have been cloned, false documentation sent to investors, and in some cases scammers have set up a range of email addresses and used the names of genuine members of staff at investment management firms.
While a number of investment products have been cloned, the IA said there was a particular focus on investment bonds.
The IA adds that fraudsters are targeting victims through sponsored Google and Facebook links, and harvesting personal details from via call centres.
It said that report of this activity spiked three months after the start of the Covid-19 lockdown, with many savers approaching firms after not received the promised quarterly interest payment.
Only on contacting the genuine firms did those affected realise they had been the victims of fraud.
Investment managers are now urging their customers and the public to be vigilant, and are working closely with regulators and law enforcement to tackle this fraud.
IA chief executive Chris Cummings says: “Our industry is determined to counter this threat, and will continue to work closely with the police and regulators to bring an end to these scams.
“Fraud and scams come in many different disguises. That’s why today we urge savers and investors to be as vigilant as possible to protect their investments and think very carefully about the risks criminals pose to their financial wellbeing.”
Steve Hyndman, director of financial crime risk at Aviva Investors and chair of the Investment Association Financial Crime Committee says investors should be particularly on the lookout for the details of the contracts offered to them, and be wary of any cold calls regarding investments or pensions.
Contact from people claiming to be from investment firms should be verified with the genuine investment firm involved. In some instances the bank accounts used are not in the names of the purported investment management firm and do not match the pre-sale literature.
He says investors should also be vigilant if they are placed under time pressure to invest – a common feature of fraud.