£4m lost to new forms of large-scale fraud

The scams, which target retail investors in particular, often involve criminals impersonating genuine investment managers and their products – particularly investment bonds – that the fraudsters then promote through fake price comparison websites, fake call centres, and targeted advertisements on Facebook and Google designed to trick victims into giving up personal information, the IA warned.

In a number of cases, scammers have set up email addresses resembling those used by real investment management companies, often using the names of employees at those businesses. 

The IA report states that some 300 instances of this fraud have been recorded to date, with a number of investment management companies affected, and estimated losses have already hit £4m.

In many cases, victimised savers only became aware of the fraud after contacting genuine companies to query why they had not received their expected quarterly interest payments. 

Investment managers are working closely with regulators and law enforcement to tackle the fraudsters, the report noted, and are in the meantime encouraging customers and members of the public to be vigilant.

Commenting on the report, Chris Cummings, chief executive of the IA, said: “During this time of great uncertainty, serious organised criminals have ratcheted up their operations and are increasingly ruthless in their mission to steal from investors. 

“Our industry is determined to counter this threat, and will continue to work closely with the police and regulators to bring an end to these scams.

“Fraud and scams come in many different disguises. That’s why today we urge savers and investors to be as vigilant as possible to protect their investments and think very carefully about the risks criminals pose to their financial wellbeing.”

Pensions Expert has reported severally on the uptick in fraud seen during the coronavirus crisis, with the vast amount of personal data held by pension funds making them a prime target for cyber-attacks in particular. 

As reported last week, figures from the Information Commissioner’s Office show that the instances data breaches resulting from cyber-attacks have soared amid the pandemic, with the number occurring between January and March this year double that of the same period in 2019.

Commenting on the IA report, Steve Hyndman, director of financial crime risk at Aviva Investors and chair of the IA Financial Crime Committee, said: “Fraudsters will always try to take advantage of uncertainty. Fake comparison sites are a clever way to hook in savers, particularly during the uncertain times we are living through now. As with all types of fraudulent activity, we would urge members of the public to remain as vigilant as they can.”