In Humberside Polices ongoing campaign to protect our communities from fraud they are warning people of the dangers of Investment fraud.
Sergeant Ben Robinson from their Economic Crime Unit said, “We know people want to make their money work for them and people often look for a quick return on their investment.
“But how can you tell if the person or company you are dealing with are acting in your best interest and will actually invest your money properly?
“How can you know if they are not fraudsters looking to scam you out of your hard-earned money?
“We have received a number of recent reports of investment scams in our area and I want to warn people to be on their guard and check the legitimacy of the people they are dealing with before they hand over one penny of their money.
“I know there is lots of useful information online but we have gathered some general fraud prevention information together here to hopefully save anyone losing money they think they are investing.
“Remember if something seems too good to be true, it generally is.
“If you think you have been a victim of Investment fraud don’t keep it to yourself – tell Action Fraud – together we can help protect our community and their money.”
What is financial investment fraud?
There are many different types of investment fraud. They usually involve people being contacted via social media or directly over the phone and being persuaded to invest in a scheme or product.
Often the schemes seem a great way to make your money grow but are actually worthless or do not even exist.
Once the caller has received their payment, they cut all contact and the money is gone.
One of the schemes seen recently in the news both locally, nationally and internationally is a Ponzi scheme.
Ponzi schemes are ‘get rich quick’ investment scams which pay returns to investors from their own money, or from money paid in by subsequent investors. There is no actual investment scheme as the fraudsters siphon off the money for themselves. Read more about Ponzi Schemes below*
How to protect yourself from Financial Investment fraud:
For more information about how to invest safely, please go to: https://www.fca.org.uk/scamsmart
Do you think you have been a victim of Financial Investment fraud?
Be careful they might try and contact you again – Previous victims may get another call from someone claiming that they can help them recover lost money. This is just a secondary scam. Hang up the phone on any callers that claim they can get your money back.
Identity theft: If you think someone has stolen or used your identity, you can check your credit rating online. You should try and get into the habit of doing this every few months, use a reputable service provider and follow up on any unexpected results.
Legal advice: We advise that you seek professional legal advice or contact Citizens Advice to understand what you can do to try and recover your money.
You can also contact the FCA’s consumer helpline on 0800 111 6768 or report suspicious businesses or individuals by using the reporting form on their website.
Citizens Advice www.citizensadvice.org.uk/
Financial Conduct Authority (FCA) www.fca.org.uk
For more information on how to protect yourself from fraud and cybercrime, or to update your crime report, visit actionfraud.police.uk.
*From the Action Fraud website: Ponzi schemes – A fraudster places an advertisement for an investment opportunity that offers extraordinary returns in a short space of time.
After receiving the promised returns on their investment, the first investors start to spread the word to family and friends. In this way, the scheme gains credibility.
Because the money isn’t invested in any kind of investment vehicle, there are no profits. Instead, the first investors are simply paid out from the money paid in by new investors.
Ponzi schemes are created for all levels of income, and have taken in investors in the top bracket as well as those on middle and low levels.
Typically, the fraudster will vanish with investors’ money, so the system eventually collapses with later investors receiving nothing – including their initial investment.
Because Ponzi schemes are unauthorised and make no profits, you are very unlikely to recover any lost money.
You can find out more about Ponzi schemes on the Action Fraud website: https://www.actionfraud.police.uk/a-z-of-fraud/ponzi-schemes