How do you spot an investment scam?
Not every scam is the same, but there are a few telltale signs.
There will probably be a higher rate of return than mainstream investments – even 3pc or 4pc is enough to catch the eye of many savers. It may involve something topical such as green energy or cryptocurrency, or it may be extremely vague about how the money is made.
It will be from a brand you have never heard of, or will copy a famous company’s name – but there will be no mention of this investment on the real brand’s website.
You will have to invest via a push payment – the kind of payment you might make to a family member where you send money directly to a bank account. Legitimate investment houses use debit card payments or direct debits, like a shop or utility company.
It is likely to be marketed as a bond, which sounds safe. It is likely to be very difficult to find the names of the people who run the investment and if you do, they will have a very limited digital footprint.
Check the website. How old is it? Has the current owner always owned it? Use the ICANN registry to see.
Are they impersonating a legitimate bank or investment firm with a similar web address? If in doubt, do not invest.
Talk to an adviser or pick a big name to avoid scams. This will not, however, rule out bad investments.
Increasingly, scammers use limited companies registered at Companies House to sell scams. Companies House does not detect fraud or audit the companies…
