Investors Lose Up To £2,168K In Ponzi Style Schemes

In June 2020, more victims reported losses in Ponzi-style schemes invested through adverts claimed to be great investment opportunities. On June 1, 2020, Action Fraud witnessed an increase in reports from victims of investment scams. 

Almost 101 victims explained how they were fooled into investing in bogus schemes, which were introduced to them by a friend, family member, or colleague (later identified as the victim). The total loss through such schemes was up to £2,167,807.

These are the schemes where the investors buy into a plan under the false impression of getting lucrative returns in the future. In reality, there is no such investment made by the team of tricksters who make false promises only to gain access to the victims' money. 

Often, such a team of scammers pays a small amount of money as a refund or first instalment to the victim to convince them that they will get money later in huge amounts, and they may incentivise the victims to recruit new victims. 

Such schemes also lure victims into buying attractive new investment schemes like cryptocurrencies or forex. 

The brochures and prospectus offered by the fraudsters may appear real. However, it links fictitious online trading platforms to the investors – which appear to be legitimate government-backed organisations. 

In reality, the links and contact details in the websites help the fraudster keep a prospective victim's personal details record. The target may sometimes get messages on social media platforms to act fast. They may stop messaging once they get the money from the victims or when the victims expect to get the returns on investment. 

The fake firms' representatives sever contact with the victim when they seek returns on investment, or they may ask them to pay extra charges to release the initial instalment of returns. 

How To Avoid Scams?

• Do not plan to invest just because your colleague or friend has invested. Instead, one should always seek professional advice or recommendations through a trusted advisor not involved in the deal to make any financial decision.

• If you deal with unregulated institutions, you may not get the FOS on losing money.

• Always take time before making any such decision, and never work under pressure to make a fund transfer or to finalise the deal on the spot.

• If you think you have been a victim – contact Action Fraud.