THE LITTLE BOOKLET OFINVESTMENTSCAMSINTRODUCTION
Criminals use sophisticated techniques to trick you into
parting with your money. This booklet will detail the current
top eight investment scams, highlight the criminal’s tactics
and give advice on how to protect yourself. For tips on how
to spot Investment Scams, check out the back page!

How do Investment Scams work?
Frauds work because on the outside they look andfeel convincing and the perpetrators act and appear
trustworthy. They could have the appearance of legitimatenames, branding, paperwork, websites… anything you may
expect to see from a genuine company, but they’re fakes.
They may also try and convince you they are ‘experts’ orhave regulatory supervision when they do not.
Most fraud involves some form of ‘social engineering’technique (see pg 3), and Investment Scams are no different.
Criminals may also claim to have lots of investors, just likeyou, who have chosen to take advantage of their greatfund, scheme or bond. It may have published above average
returns or promise to significantly increase your profits withlow or very little risk. They may target you and other people
in similar groups or communities (ex-pats, religious faiths,
sports enthusiasts).

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The tactics
False advertising can appear on any newsfeed,
search engine advertising, comparison sites(fake or genuine), and social or business media
platforms. Criminals often use fake endorsements
by celebrities or famous businesspeople.
Fake websites can look professional and convincing,using official branding and logos from genuine
companies. They are easy to produce and can be
securely designed to prevent people finding out
who really owns them.
Mobile numbers and landlines can be made toappear as any number the criminal wants them to,including legitimate numbers for companies.
Criminals sometimes avoid video conferencing whereconversations can be recorded, and people seen.
Professional looking paperwork is available and also
sent to you, with in depth detail.
Access to investment portals could be provided sothat you can monitor and manage the increases inyour initial investment and, in many cases, an initial
return on your investment is paid into your bankaccount. However, this is only in order to convince
you to invest more.
They will often encourage you to invest quickly as
the offer may be time limited in some way.
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SOCIAL ENGINEERINGAll of the frauds described in this booklet are covered
under Section 2 of the Fraud Act 2006, Fraud by False
Representation. By this very definition, they involve thecriminal scamming the victim by lying or misrepresenting
the situation. This often involves social engineering.
Social Engineering is defined as ‘The clever manipulation of
the natural human tendency to trust’, and it is this natural
inclination that criminals take advantage of. Usually, thecriminals’ aim is to prey on people’s emotions, and get themfeeling rather than thinking.
One of the biggest tactics they use is pressure. For example,
this could be time related “if you don’t do this in 5 minutes,
you’re going to be in big trouble”, or financial “unless you
agree to this, you’re going to lose thousands”. Also, forinvestments in particular, “this is a one-time offer that is
only available to you right now”. Whatever the wording,the criminal puts you under pressure to decide, without
allowing you the time to think it through.

3How to protect yourself
Criminals are experts at impersonating people, organisations
or even the police. They spend hours researching you for theirscams, hoping you’ll let your guard down for just a moment.
Stop and think. It could protect you and your money.
Remember:
The best defence against social engineering attacks is
knowledge. Once you know someone is trying to conyou, the con will fail. Reading this booklet should help
give you some of that knowledge.
However, even if we’re suspicious, we’re often bad atsaying “no” to people. So, if you’re uncertain, you canalways try these alternatives:• “I can’t make that decision without authorisation.
Let me get back to you”.

• “I will not make any decisions without speaking tosomeone first”.

However, don’t be afraid to simply say “no” to someone.
If they’re a genuine professional, they won’t mind you
taking the extra time to verify their identity or offer
of investment. If they become pushy or insistent, thenodds are fairly high that it’s some form of scam.
Don’t forget to check out the back page for more usefultips and tricks.
You can also get more advice at https://takefive-stopfraud.
org.uk/advice/general-advice/investment-scam/
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SCAM 1PENSION SCAMSTHE CLAIM
Criminals attempt to sell a too-good-to-be-true, ‘one-off’investment sometimes via unsolicited contact or authentic
looking websites you may find yourself. They may attempt
to entice you with upfront cash payments. They often offera ‘free pension review’ to give the impression that they arehonest and independent advisers.
They could advise you to ‘liberate’ your pension into oneof these schemes before you turn 55, which isn’t permitted
under UK pension rules and can attract an unauthorised
payment tax of up to 55%.

THE SCAM
They may advertise online, via social media or in the small
ads of reputable publications. They design attractive offers,
normally in the form of high interest rates or impossible
to achieve returns, all to entice you to invest all or asubstantial part of your pension pot.
They will claim they are authorised by the Financial Conduct
Authority (FCA) or a similar regulator in another jurisdiction.
Or, they may say they don’t have to be authorised because
they aren’t providing advice themselves, or they’re acting on
behalf of the FCA or a government service.
The pension money is often invested in unusual, high risk
investments, or it can be simply stolen outright.
5How to protect yourself
In the UK, it is unlawful to cold call about pensions, so
reject unexpected offers.
Check the status of a firm with the FCA beforechanging your pension arrangements. You can call the
FCA helpline on 0800 111 6768 to check to see if thefirm is allowed to give pension advice. You can checkthe authorisation status of any genuine firm on theirregulator’s website.
Don’t be rushed into making any decision about
your pension.
Be wary of promises of high returns that are ‘guaranteed’,‘fixed’ or ‘secured’. The higher the promised returns,
the riskier the investment. Promises of guaranteed
returns should be looked at very carefully. If it sounds
too good to be true, it probably is!
Seek impartial advice, and thoroughly research thecompany before you do anything.

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SCAM 2

THE PONZI SCHEME
THE CLAIM
Criminals claim they have developed a system which isguaranteed to work. Whether it’s a secret formula, or
proprietary technique, it’s a promised return on investment.
They even have testimonials from previous customers,
perhaps even people you know who vouch for it.

THE SCAM
There is nothing special to it. The initial investors receive areturn from the money given by the second wave of investors.
The second wave receive theirs from the third, and so on.
You’re regularly encouraged to invest additional money and toencourage as many of your friends and family to do the same,
thus increasing the cost and subsequent impact of the fraud.
Some tell-tale signs include:• The risk versus reward promises are too optimistic.
• The scheme returns don’t follow overall market trends.
• The mechanics of the scheme are ‘too difficult’ or ‘toosecret’ to explain.

• Reports and documentation are hard to obtain or don’t
have the right information.

• Depending on where the Ponzi scheme is in its lifecycle it
may be difficult to remove money.

• Only select people are ‘allowed’ to join.
• It may be sold as a ‘one-time entry’ offer.
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How to protect yourself
Look into the company offering the investment scheme
thoroughly. Find as much independent information as
you can by using the websites of regulators, such as the
FCA. Don’t trust anything you see on any website orsocial media to which the company directs you.
Always double check.
Choose regulated firms who have the right licences,such as the Markets in Financial Instruments Directive(MiFID) and the Insurance Distribution Directive (IDD).
Be wary of promotional material that promises great
returns without much detail.
Lots of existing investors, or friends and family
investing, does not mean it’s not a scam. It just means
there are lots of victims, some of whom you know.
Criminals will encourage you to make hurried decisions
and may use technical jargon designed to baffle andconfuse. They may also tell you there is a deadline inorder to invest or be included due to high demand.
Ask simple questions about the company and scheme andbe very wary if they dodge the questions or are unable toprovide clear answers with supporting documentation.

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SCAM 3

BINARY OPTIONSTHE CLAIM
Criminals claim to have a highly accessible, super easy way
to gain wealth simply by betting on whether the ‘option’will go up or down in value. No prior knowledge of thestock market, binary or investing is necessary, just thedesire to succeed with the help of the provider.

THE SCAM
Like the Ponzi scheme, the fraudulent traders will tout theirunique system as a way to help you beat the odds. This will
be either a completely ‘unfit for purpose’ platform or a rigged
set up which will ensure overall losses rather than gains.
To help reassure the customer a practice account – also rigged,
will allow you to test the system in a safe environment using
pretend money. This will deliver false successes and motivate
you to spend your real money in a ‘live’ account.
Binary option frauds are all about manipulating an online
system under the control of the scammer so it has theappearance of legitimacy and success. It is designed with
the intention of the investor losing as much as possible,
as quickly as possible.

9How to protect yourself
From the 2nd April 2019, all firms were permanently
banned from selling binary options in the UK, a similarban enforced by ESMA (the European Securities &Markets Authority) came into force across Europe in 2018.
If you are offered one, it is certainly a scam.
Companies outside of Europe will also be covered by theban, so if you are approached by a non-UK/EU firm, they
are not allowed to sell these options in the UK or Europe.
If you have been a victim of a scam from before 2nd
April 2019 and are in the UK, then you can contact the
FCA on their consumer helpline on 0800 111 6768.

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SCAM 4

CRYPTOCURRENCYSCAMSTHE CLAIM
Cryptocurrency fraudsters often advertise on social media –using the images of celebrities or well-known individuals to
promote and endorse cryptocurrency investments. The adverts
link to professional-looking websites. Customers are persuaded
to make investments with the firm using cryptocurrencies
or traditional currencies.
The firms operating the scams are usually based outside thecountry you live in but will claim to have a local presence.

THE SCAM
Fraudsters will either call you or use social media platforms
to advertise ‘get rich quick’ investments, trading incryptocurrencies.
Criminals will convince you to sign up via cryptocurrency
investment websites and to part with your personal
information, such as credit card details and driving
licences, to open a trading account. You’re then asked tomake an initial minimum deposit, after which the fraudster
will call you to persuade you to invest again in order toachieve a greater profit. Even if you’ve realised you’vebeen defrauded, it’s usually after the website has been
deactivated and the criminals can no longer be contacted.

11How to protect yourself
Always be cautious if you receive uninvited investment
offers, if you are pressured to invest quickly, or
promised returns that sound too good to be true.
Don’t assume it’s real – professional-looking websites,
adverts or social media posts don’t always mean that an
investment opportunity is genuine.
Stay in control – if you’re thinking about making an
investment, get independent financial advice andthoroughly research the company first.
Be wary of adverts online and on social media
promising high returns on investments incryptocurrency or crypto asset-related products.
Do further research on the product and the firm withwhom you are considering investing. Check with
Companies House to see if the firm is a registeredcompany and check for directors’ names.

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SCAM 5

FOREIGN EXCHANGE
TRADINGTHE CLAIM
The foreign exchange market, also known as Forex, or FX, isa decentralized global market for the trading of currencies.
Criminals conduct unauthorised trading offering the chance
to trade in the foreign exchange. They often use posts onsocial media which contain fake celebrity endorsements
and images of luxury items. The posts link to websites
created by criminals that have the look and feel of areal Forex trading platform. Offering guaranteed profits,
they create accounts for you, with some receiving small
returns to portray legitimacy, which in turn gives you theconfidence to trade further.

THE SCAM
The trading account that you’re given access to may appear
real, however it’s a manipulated demo account where no
actual trades take place.
You may be deceived into thinking that your investment has
made a profit, and you may even receive a small return.
You’re then encouraged to invest more money (for greater
profits) or introduce others to the fake platform and if you want
to withdraw, you’ll be charged exit fees. Eventually the returns
stop, and your account is closed with no further contact.

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How to protect yourself
Be suspicious of any approaches or adverts on social
media. Do not give out personal or financial details.
Never agree to anything or send money upfront,
without making your own enquires into the company orindividual first.
Don’t assume it’s real. Professional looking websites,
adverts or social media posts don’t always mean thatan investment opportunity is genuine. Criminals can use
the names of well-known brands or individuals to maketheir scams appear legitimate.
Stay in control. If you’re thinking about making an
investment, thoroughly research the company first andconsider getting independent advice.
Make the right checks, firms providing regulated financial
services must be authorised by the FCA. You can check
whether they are authorised on the Financial Services
Register section of the FCA website. Use the contact
details on the register, not the details the firm gives you,to avoid possible ‘clones’.

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SCAM 6OVERSEAS PROPERTYAND CROP SCAMSTHE CLAIM
Fraudsters may offer you the chance to buy a plot of land,for example, a plot on a plantation that harvests
agricultural commodities such as teak trees, jatropha,
paulownia and biofuels.
The investment is usually stated to be low risk but
promising high, often guaranteed returns of around 15–25%.
The investment period is typically about five years, after
which your plot will be harvested and sold on your behalf
and the profits forwarded to you.

THE SCAM
Criminals usually call individuals out of the blue, but canalso make contact via email, post or word of mouth.
They can also target you at an event, seminar or exhibition.
They may use professional looking material including
brochures, websites and videos to convince you that theirproperty or crop investment is a great opportunity. Once
investment is made the criminal may then cut contact
straight away or try to get more money from you first.
Regardless, either the land doesn’t exist, or the criminal has
no rights to sell it.

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How to protect yourself
If it sounds too good to be true, it probably is.
Genuine land and property companies will most likely
make their offering via a network of independent
financial advisers and brokers and via advertising rather
than contacting you by phone. Be wary of someone
calling you to directly offer you a plot of land.
Research both what you have been offered, and theinvestment company. Speak to Trading Standards if you
have concerns.
Consider getting impartial information and advice fromregistered financial institutions and brokers.
The FCA does not regulate the sale of land, trees orcrops, nor do the regulators in other countries andjurisdictions. However, they do regulate Collective
Investment Schemes (CIS) which can involve overseas
property and crop schemes.

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SCAM 7

UNREGULATEDINVESTMENT SCAMSTHE CLAIM
A Collective Investment Scheme (CIS) is a pooled investmentthat usually has several people contributing to it and isinvested by a fund manager into one or more types of assets.
An Unregulated Collective Investment Scheme (UCIS) is
one that is neither authorised or recognised by the FCA
and as such are not subject to UK requirements, making
them riskier assets (forestry, property, film production)or investment strategies (compared with CIS). The FCA
may have a register you can check to determine if a CIS isauthorised or unregulated.

THE SCAM
Some UCIS are just straightforward scams. Some are genuine,
but can in many cases over-promise and under-deliver, or are
sold illegally.
Usually they claim to offer high returns, which you should
always see as a red flag. High returns always come withhigh risk.
Scams are often based outside of the country in which you
reside but claim to have a local base, often a prestigious
London address.

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How to protect yourself
Always be cautious if you receive any uninvited
investment offers, if you are pressured to invest quickly,or promised returns that sound too good to be true.
Check the FCA website to make sure you’re not dealing
with a known scam.
Check Companies House to see if the company isregistered in the UK or the local commercial registers
if outside the UK and look for the names of directors –many have a chequered past and there may be
information about them online.
Check investment web forums – people often postconcerns about firms or investments.
Always seek independent financial advice or guidance
before investing.
Because they’re unregulated, you can’t make a complaint to
the FCA, if you think you were mis-sold the product or caught
by a scam. The Financial Services Compensation Scheme(FSCS) may provide protection if an authorised firm which
you have been dealing with has done something wrong andgoes out of business. The Financial Ombudsman Service
settles complaints about authorised financial services firms.
If you use the services of a firm that is not authorised you
generally will not have access to the FSCS or the Ombudsman.

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SCAM 8

CLONE FIRM SCAMSTHE CLAIM
You find yourself, or are approached by, an investment firm
claims to be registered with the FCA. Once contact has
been made, and ‘bona fides’ established, then the criminal
can attempt to run any of the other types of Investment
Scams in this booklet, or indeed any type of fraud.

THE SCAM
Criminals set up fake firms, but use the name, address
and Firm Reference Number (FRN) of genuine investmentcompanies registered with the FCA. These might include
websites with a slight difference in the URL. They may use
the correct reference numbers on the FCA website and may
even fake up official looking logos or kite marks. Once set up,these fraudsters will then send sales materials either linking
to their doctored website, or the websites of legitimate firms,
to dupe you into thinking they are the real firm when they
are not. They can then run whatever scam they choose
once they have convinced you of their authenticity.

19How to protect yourself
Reject unsolicited investment offers whether madeonline, on social media or over the phone. Be wary even
if you initiated contact.
Always check the FCA Register to make sure you’redealing with an authorised firm and check the FCA
Warning List of firms to avoid.
Only use the telephone number and email address on the
FCA Register, not the contact details the firm gives you.
Look out for subtle differences in URLs, email addresses,
phone numbers and the FRN number. Don’t forget that
incoming phone numbers can be spoofed or disguised.
Consider seeking impartial advice before investing.

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REPORTING SCAMS
Get help and report a scam
If you think you have uncovered a scam, have been targetedby a scam or fallen for a scam, there are many authorities
you can contact for advice or to make a report.
In the first instance, you should contact your bank
immediately on a number you know to be correct, such as
the one listed on your statement, their website or on theback of your debit or credit card.
Report scams and frauds in the UK to Action Fraud, either
online at www.actionfraud.police.uk or by telephone on
0300 123 2040. If you are deaf or hard of hearing you can
use textphone 0300 123 2050.
If you are in Scotland, please report to Police Scotland directly
by calling 101 or Advice Direct Scotland on 0808 164 6400.
Every report assists police investigations, provides intelligence,
informs national alerts that protect all communities, disrupts
criminals and reduces harm.
In the UK you can forward scam text message to OFCOM
on 7726 (free of charge), and forward suspicious emails toreport@phishing.gov.uk
And don’t forget to share your experience with friends andfamily to make sure they don’t fall for the same scam.

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Financial Conduct Authority (FCA)
In the UK, a firm must be authorised and regulated by the
Financial Conduct Authority (FCA) to do most financial
services activities.
Financial Conduct Authority (FCA)
www.fca.org.uk or 0800 111 6768
www.fca.org.uk/scamsmart
Financial Service Compensation Scheme (FSCS)
www.fscs.org.uk
Financial Ombudsman Service
www.financial-ombudsman.org.uk
National Trading Standards
www.nationaltradingstandards.uk/work-areas/scams-team/Contact us
To contact the Metropolitan Police Cyber Crime Protect Team,
email cyberprotect@met.police.uk or call 0207 230 8129
For more information, visit www.met.police.uk/fraud
For our books, leaflets and videos visit
www.met.police.uk/littlemedia

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HOW TO SPOT ANINVESTMENT SCAM
Look out for the following:• You see ads within your social media feeds, sometimes

celebrity endorsed, offering high returns on investments• You’re pressurised into making a decision with no time
for consideration• You’re offered a high return on your investment withapparently little or no risk

• You’re told the investment opportunity is exclusive to you• You’ve used search engine results i.e. an advert to find an
investment opportunity• You’re contacted out of the blue by phone, email orsocial media about an investment opportunity;

ALWAYS REMEMBER
Check the Financial Conduct Authority’s register for
regulated firms, individuals and bodies. You can check thefirm or individuals’ website is genuine by checking their
web address, watching out for subtle alterations.
STOP
Take a moment to stop and think before parting with yourmoney or information that could keep you safe.
CHALLENGE
Could it be fake? It’s ok to reject, refuse or ignore any requests.
Criminals will try to rush or panic you.
PROTECT
Contact your bank immediately if you think you’ve fallen fora scam and report it to Action Fraud.
Find out more at: www.takefive-stopfraud.org.uk
https://takefive-stopfraud.org.uk/advice/general-advice/investment-scam/
Published by the Metropolitan Police Service © Mayor’s Office for Policing and Crime and the Crown, 2021