Recent pension freedoms and low interest rates with poor savings returns are making consumers aged more than 55 years an increasing target for investment fraudsters, according to a research by the Financial Conduct Authority (FCA).
The study revealed that investment fraud vicitims lost £32,000 each on an average last year.
Nearly one-third (32%) of consumers aged 75 and 22% of over 55s have been targeted by a fraudulent investment scam in the past three years.
However, the study found that 14% of over 55s investing in financial products spend little or no time researching the products before investing.
Over 75s are the most likely segment to say that they have been contacted by an investment scam, and yet 26% of this group is most likely to do little or no research before investing.
Only 27% of the respondents said they looked for professional advice prior to making investments. The most common check carried out before investing was to look at a company’s website.
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The average cost of major building work in the study stood at £25,000, versus £36,000 spent on financial investments. The study also unveiled that consumers researching building work were more than those researching financial investments.
Also, 55% of those making financial investments did so on their own, instead of seeking advice of family, according to the study.
FCA director of enforcement Mark Steward said: “Making a significant financial investment is an important decision – be prudent, do your homework and be especially on guard if contacted out of the blue by someone you don’t know.
“Fraudsters are targeting our growing over 55 population because they are more likely to have money to invest. They may pressure you to make a quick decision or try to make you feel stupid for not taking up their bogus offers.”