Fraud investigators are bracing themselves for a record number of claims as thousands of investors are losing money to scammers.
More than 8,000 frauds have been received by the police’s National Fraud Intelligence Bureau this year already.
But one of the NFIB’s main tools for collecting data – the Action Fraud web site – was revealed to be failing, according to an undercover inquiry by The Times newspaper.
Meanwhile, The Times published video footage appearing to show police failing to properly investigate reports from victims and managers calling investors who had lost money as morons.
Financial platform AJ Bell disclosed the rising number of fraud claims following a freedom of information query to the NFIB.
Fraud is mutating
The firm’s senior analyst Tom Selby said: “Financial fraud in the UK is mutating, with the number of victims of older-style ‘pension liberation’ scams dropping in recent years on the back of a series of government interventions – including the ban on cold-calling – and a significant industry-wide public awareness campaign.
“However, as pensions-based scam reports have fallen, the number of people falling prey to scams focused on their investments has continued to rise and look set to hit record highs in 2019.
“This might reflect the fact more people are now reporting being scammed to the relevant authorities, or it could be because fraudsters have shifted their focus to investment-based schemes.
“Either way, these figures clearly demonstrate that scams remain a clear and present danger to savers who need to be vigilant when deciding how to invest their money.”
Government action needed
AJ Bell is urging the government to act to reduce the number of scams.
“The surge in investment scam reports also suggests politicians and regulators need to focus their attention on this area. In particular, the Government should review its decision to exclude investments from the cold-calling ban introduced for pensions in January this year,” said Selby.
“Although cold-calling is just one tactic scammers use to target savers, it remains a common one which preys on the most vulnerable in society.
“Tackling the promotion of scams online is also a significant public policy challenge, although solutions here are complex given the global nature of social media channels.”