Since the beginning of 2020, investment fraud has taken a staggering £2.6bn ($3.2bn) in the UK.

This is according to a new study by the Pensions Management Institute (PMI) and the data was gathered through a Freedom of Information request to the City of London Police’s National Fraud Intelligence Bureau. 

UK investment fraud

A breakdown of the data, there were 98,525 victims of investment fraud between January 2020 and December 2023, with thieves taking about £13m every week.

Over the course of time, victims have lost an average of £26,773 to these investment frauds. 

One of the most prevalent kinds of investment scams, boiler room fraud has cost consumers £553m in total. In this particular scam, victims are enticed or coerced into purchasing bonds or shares in worthless, non-existent, or almost insolvent corporations by impersonating stockbrokers over the phone.

In the UK, 20,789 people have fallen victim to this kind of fraud since January 2020. 

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Another popular type of financial fraud is Ponzi or pyramid schemes, which have defrauded 12,323 individuals in the UK since the beginning of 2020 by laundering £499m.

Investors are enticed to participate in a Ponzi scheme by promises of exceptionally large earnings. On the other hand, no investment is made in their name. Up to the scheme’s demise, early investors receive returns on their investments from later investors. 

In 2023, 26,740 individuals became victims of investment fraud, the highest number in the four years examined by this research.

These scams cost investors £527m, which equates to more than £1.4m every day. In 2023, boiler room frauds stole £106m, while Ponzi schemes took £63m. 

Robert Wakefield, president of the Pensions Management Institute, said: “Our research shows that a shocking number of people are falling victim to investment fraud. It is concerning that every year thousands of people are losing millions of pounds to financial scams in the UK. The number and sophistication of investment scams is ever-growing.

 “By maintaining a healthy dose of scepticism and training yourself to spot some common red flags, you may be able to protect yourself and your loved ones from becoming victims. Increasing the amount of financial education provided in schools could also help to make people more aware of the risks of investment scams.”

FCA warning signals

  • Is it unexpected? Scammers often call out of the blue. They may also try and contact you via email, text, post, social media, or even in person.
  • Do you feel pressured to act quickly? Scammers might offer you a bonus or discount if you invest quickly, or they may say the opportunity is only available for a short time.
  • Does the offer sound too good to be true? Fraudsters often promise tempting rewards, such as high returns on an investment.
  • Is the offer exclusively for you? Scammers might claim that you’ve been specially chosen for an investment opportunity, and it should be kept a secret.
  • Are they trying to flatter you? Scammers often try to build a friendship with you to put you at ease.
  • Are you feeling worried or excited? Fraudsters may try to influence your emotions to get you to act.
  • Are they speaking with authority? Scammers might claim that they’re authorised and often appear knowledgeable about financial products.