Consumers warned about a big rise in serious investment scams

The scammers primarily target over 55s and disguise themselves as legitimate brands. Oftentimes they seek investment of €20,000 or more.

Consumers are being warned of a big rise in serious investment scams.

Fraudsters are employing “highly convincing” and elaborate scams that “appear to be legitimate” in order to dupe older customers in particular, according to FraudSMART, the fraud awareness initiative run by the Banking & Payments Federation Ireland (BPFI).

Scammers present themselves as legitimate by using branded brochures of well-known investment schemes and bonds. They also employ fake product comparison sites that lure in unsuspecting targets.

FraudSMART said there has been a “marked rise” in the number of these scams in recent times, especially those targeting people over over the age of 55 as they near pension age and seek to maximise their retirement pot.

The initiative is especially concerned with the value of these scams, with scammers often demanding a minimum investment of €20,000

Fraudster’s targeted schemes

The current economic climate, with rising interest rates and sky-high inflation, has seen consumers seeking other ways to future-proof their savings.

With savings accounts interest rates still lagging far behind the rates charged for loans and mortgages, punters are increasingly seeking non-bank investment opportunities.

And fraudsters seem to be catching on to this trend.

The key to these elaborate schemes is that because the potential payout for these scams is so high, fraudsters can employ greater resources to seem legitimate.

FraudSMART has said that in addition to the brochures and websites, the fraudsters also make contact through cold-calling, emails and social media.

So, it’s important to stay safe and vigilant on all fronts.

Things to look out for with fraud

FraudSMART has included a handy list of red flags to look out for in case you suspect that the website or person you are dealing with may be fraudulent.

These include:

Being cold-called about an investment opportunity. This can include an unscheduled phone call, email or social media message.
You are given a time constraint on your decision - this includes being hurried into making a decision, as you are unable to fully weigh up your options in such a short period of time.
There is a promise of a quick return on your investment with little to no risk.

Steps to take to avoid investment scams

In addition, FraudSMART has provided a checklist of steps to take before interacting with any investment opportunity online:

Stop and think - does the opportunity sound too good to be true? If so, it probably is.
Take your time - very few investment opportunities require you to hand over cash immediately. If someone is trying to demand instant investment, be wary.
Research thoroughly - check the firm and individual’s credentials, qualifications and history. The Central Bank Consumer Hub is a good place to start.
Verify the information - check all of the information with a third party, such as a legal or financial advisor and consult with your close family and friends.

Particularly targeted fraud

Speaking on the issue at hand, Niamh Davenport, Head of Financial Crime at the BPFI, said:

“Initial indications suggest that the scams are particularly targeted at those in the over 55 age bracket with a minimum investment of €20,000 and in many cases upwards of that. While the amounts may seem high it’s important to point out that the victims are not necessarily wealthy customers, but often people on low to average incomes who have worked hard all their lives to build up a pension and are at a stage where they are looking for a last opportunity to top up their finances ahead of retirement.”

Davenport also spoke about a case of an elderly customer who was about to invest €60,000 from their pension into a fraudulent investment scheme. Fortunately the customer contacted their bank beforehand and the scam was identified.

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