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FCA warns consumers on investment fraud

The FCA has launched a national campaign to prevent consumers from getting caught up in investment fraud and to identify potential scams.

Using funds recovered from the proceeds of crime, the regulator has set up the Scamsmart website which encourages consumers to reject cold calls about “investment opportunities.

The website also directs people to the FCA’s warning list, which flags firms such as those operating clone sites and those that are unauthorised to operate in the UK. Consumers can also check the kind of investment they have been offered, where the regulator will explain the “potential pitfalls” of the investment recommended.

Money Marketing  revealed in August last year that of 100 unauthorised firm warnings the FCA had issued, 31 firms were still operating active websites.

The FCA is also encouraging investors to seek advice before making an investment.

The regulator says the average investor loses around £20,000 and it receives around 5,000 calls a year from investors about suspected investment fraud.

FCA chief executive Martin Wheatley says: “Those operating investment scams use very sophisticated techniques to build trust and can dupe even experienced investors out of their savings.  

“We would caution against anyone taking a risk on a firm or individual who isn’t authorised by the FCA.”

In the last year, the FCA processed 6,593 reports of suspected unauthorised activity, issued 295 consumer warnings and removed 61 websites promoting suspected boiler rooms.

The regulator has also secured criminal convictions against four individuals who were involved in unauthorised activity, including running fraudulent investment schemes. It has also taken eight civil injunctions this year.



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There are 8 comments at the moment, we would love to hear your opinion too.

  1. And not before time to !!

    I whole heartedly support this, and hopefully this will not stop here, the regulator needs to keep ramming this message home as it can only come from them to make it really credible.

  2. At last the FCA doing it’s job!!!

    After all the consumer may be surprised to know that one of the FCA’s statutory objective is to PROTECT THE CONSUMER!

    When was the last time the FCA ran an advertising campaign to highlight the FCA register?

    Answer NEVER!!

    I like many advisers will welcome this BUT it is long overdue and more should be done to highlight the FCA register and the problem of unauthorised advice and investments.

    Just in case the FCA did not read this right. One of your statutory objectives “IS TO PROTECT THE CONSUMER”

  3. At last something from the regulator I am happy to forward to my clients, to forward to their family and friends.

    I would also like to see adverts showing people having lost all their life savings and how to avoid becoming like these individuals.

    Unfortunately in the UK unless it is doom and gloom, just like the nations most watched soaps they do not want to listen. In fact the best way to show this and get the point over would be to have story lines within the soaps. Someone investing via one of these schemes, giving their pension details and showing what can happen and how it could have been avoided. The UK consumer would most likely pay more attention to this then any advert, which is a very sad fact.

  4. A couple of things-

    1. Unless the mainstream press/media promote this site, the public will not see it.

    2. I tried out the site, putting in examples of well-known scams and nothing came up. You have to link the scam with a specific firm and if the promoter is unknown to the FCA, then there is no information.

  5. Surely, the FCA should be promoting the register and highlighting the general point of taking advice from authorised and regulated firms.

    I suspect if this is a simple list of known scams we could have the following problems:

    1: If the scheme is not on the list people will think it’s okay when the list may not be definitive.

    2: There may be legitimate legal reasons why the scheme cannot be placed on the list.

    I did a search for a well-known overseas property firm selling investments opportunities for SIPP. There is an FCA warning notice for “H******” but it doesn’t work on the search engine. !!!!

    These are only two of the reason that may be a concern and surely it is better to raise awareness of the register and the need to make sure that the adviser or firm is authorised.

    Simple surely why else have authorised firms!

    Why is the FCA also referring people to when they hold all of the data of authorised firms, surely they could create their own webpage from their own register.

    I sometimes wonder why we pay our fees is it really that hard to create an authorised directory?

    This problem is going to get even worse with so-called guidance advice, after all there are a number of websites giving information on pension freedom already and some of the information is incorrect.

    This is a good start though, just needs more work and thought!

  6. I agree with Peter Herd on this. Peter’s questions as to why would better be asked of the FCA by the TSC as the FCA take NO notice of advisers, PFS or APFA and only a little of the TSC, but a little is more than None.

  7. Phil Castle

    Thanks for your support and of course the FCA take no notice of hard-working advisers as they are only interested in listening to the likes of consumer magazines and websites like Which, Money Supermarket or even that well-known unauthorised source of information Martin Lewis of Money Saving Expert.

    I really do despair that the FCA has an authorisation system in place, only for the FCA to turn a blind eye to almost every single website offering information and services without authorisation.

    It seems pots to me that an adviser making a specific recommendation is held responsible for that advice as long as the client lives but a website or magazine can print almost anything with incorrect information and not face any sanction. Brave new world of pensions and ISA liberation my advice is watch out as the scammers will go into overdrive without tighter authorisation rules.

    Maybe money marketing could ask a question for us advisers to the TSC of why the FCA does not enforce authorisation rules properly?

  8. @ Peter

    I agree, also its funny when you read the other articles on MM today RE-: Non advised sales (Ex only) have also doubled, surely this has also got to be highlighted by the FCA to the consumer

    I don’t know about you but in my 22 odd years I have only transacted 1 Ex only case !

    What worries me is if large amounts of business is being transacted on this basis, do the clients know ? and is this storing up a lot of trouble down the line ?, which no doubt we will have to pay for ?

    Non-advised / ex only (top ups to existing policies aside) should be very rare !!

    Not wishing to name names but I really don’t know how some get away with it ?

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