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BLOG | Money for nothing: spot the signs and be #scamaware

4 Jul 2016

Author: Fraser Sutherland, CAS Policy Officer

When saving money we all want to get a decent interest rate. What if I told you I knew a secret opportunity to invest in a new government backed forestry land protection scheme that guaranteed you a 20% return on your investment in just a year? Or a new way to put your pension savings to good use with a 100% risk free guaranteed stock exchange fund? Sounds good don’t they? The truth is they don’t exist and neither do the thousands of fake investments being pushed at Scots every year.

At the Scottish Citizens Advice service we help people every week who have been targeted by investment scammers desperate to get their hands on their pension pot or life savings. These fraudulent schemes have no regulation, no protection and no intention of giving you a fair deal or even your money back. While all investments carry a certain level of risk, those provided by a firm regulated by the Financial Conduct Authority (FCA) make sure your money doesn’t just disappear into thin air as soon as you send it.

Many of the people we hear from tell us that they have been offered investment opportunities in land, wine, diamonds or art with big returns. Others report to our advisers that they have been offered free pension review checks or new green environmentally friendly investments. No matter what is being sold it always have one underlying theme, there is a criminal just itching to get their hands on your money. 

Thankfully the FCA have produced a warning list of firms to avoid that you can check to see if the firm mentioned is fake. CAS has also produced a guide to help keep you up to date with the latest scams. You can download it here or speak to your local CAB for information. To start you off here are our top ten tips to avoid rogue investments:

  1. Don’t invest in schemes sold by cold callers - they are usually at best very high risk or at worst a complete fraud.
  2. Avoid promises of unrealistic returns, for example offering large interest returns compared to other deals available.
  3. Be wary of those who downplay the risks in your investment. Be especially wary of firms who sell a scheme as “100% risk free” or similar.
  4. Be wary of people who tell you that it’s a time-limited offer and you must act quickly to get the investment.
  5. Avoid any person or scheme that tells you to keep the investment opportunity a secret.
  6. If someone is offering you financial advice, such as recommending where to invest your money, ensure they are regulated and licensed by the Financial Conduct Authority.
  7. Take care of anything that looks to move your money out of the UK overseas, especially if you have never invested abroad before.
  8. Be suspicious of any contact which mentions ‘free pension review’, ‘one-off investment opportunity’ or ‘legal loophole’.
  9. Take proper independent advice before agreeing to anything that requires you become a company director or trustee.
  10. Ignore promises of a large return if you invest all your savings in one single place.

If you aren't sure about something you've received or a recent investment opportunity you've replied to come get free, confidential advice from your local CAB or on our consumer helpline 03454 04 05 06

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