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FCA warns of investment scam risk for over-55s

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The FCA has found nearly half of people aged over-55 investing in unregulated products do so without seeking professional advice.

The study, which is part of the regulator’s Scam Smart campaign, surveyed 2,300 UK residents and found 41 per cent of over-55s had moved money out of savings into investments in a bid to get a better return.

It says the current low interest rate environment is one of the key reasons over-55s are looking to invest in a wider range of unfamiliar types of investment products with 26 per cent of those surveyed choosing to invest in unregulated investment products.

Some 23 per cent say they are considering investing in unfamiliar types of investments in the future while 27 per cent of those who fell victim to investment fraud had bought an unregulated product through an unauthorised firm.

Those considering investing in unregulated products in the next 12 months say they would invest an average of more than £4,000 with land, wine and art listed as popular investment choices.

Of those surveyed, 13 per cent were unaware unregulated products bought through an unauthorised firm offered no protection from the Financial Ombudsman Service or the Financial Services Compensation Scheme.

Nearly half invest in unregulated products without getting professional advice or checking the FCA’s warning list.

FCA enforcement director Mark Steward says: ‘You don’t need to be gullible to lose money to a scam or fraud. Fraudsters target financially sophisticated people too, who often don’t like to ask what might sound like silly or basic questions.

“Our research found that 60 per cent of those that have experienced investment fraud have not reported it, so the problem could be greater than we know and by reporting it you are helping us to protect others.”

Cold-calling is also an issue for over-55s with those being contacted by firms they had not heard of reporting a 40 per cent increase in unsolicited contact.

One third of retirees reported being contacted by a firm offering investments in the past 12 months with 37 per cent being contacted as many as three times.

Just under half of those who experienced investment fraud made their investment following unsolicited contact.



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There are 5 comments at the moment, we would love to hear your opinion too.

  1. Yes, this was big news in the Dailies today. Osborne knows full well that the majority of the population are a few sandwiches short of a picnic. That he didn’t (or just wouldn’t) realise that things like this were bound to happen is a sad reflection of the cynicism and/or ineptitude of those who govern.

    If the Regulator, in its constant mission to save the foolish from themselves, wishes to curtail this sad state, then make it so that the rules make it fiendishly difficult (if not virtually impossible) to trash the cash. Of course they are not likely to do this as, in spite of protestations to the contrary, they are in the end nothing but a tool of the Treasury.

  2. There were many (including myself) industry commentators that set out more than 18 months ago that this would be a consequence of pension freedoms so why has it taken so long for the Regulators to wake up and smell the roses?

  3. Meanwhile the government has been merrily steering people away from regulated advisers to MAS/Pension Wise etc. Nicely joined up thinking there.

  4. Julian Stevens 25th May 2016 at 1:55 pm

    A fool and his money are easily parted and all the regulation in the world will never change that. That said, one might reasonably think that were the FCA to spend just a few million quid on a public awareness campaign via the media, potential victims might just be prompted to make at least some effort to check out the bona fides of a firm promising spectacular returns with virtually zero risk before handing over the their cash or authorising the transfer of their pension funds.

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