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Fraud newsletter: Investment Fraud special - June 2022 edition

"Each month we see many incidents of fraudsters targeting our residents in an attempt to defraud them. We’re working hard to prevent this and support vulnerable victims of fraud or scams. By following our tips and encouraging family, friends and colleagues to do so too, you can reduce the risk of becoming a victim." 
T/Detective Chief Inspector Rob Walker, Surrey Police & Sussex Police Economic Crime Unit

What is investment fraud?

This is often initiated by a cold call, attempting to sell investments in an emerging market, e.g. wine, diamonds, bitcoins, cryptocurrency, carbon credits, time-share etc. Fraudsters may also target victims by fake advertising online using well-known brands or celebrity names claiming they endorse the fake investment.

The fraudsters will claim this will lead to financial gains above the usual projections, high returns or get rich quick schemes. In reality the item offered may not exist or is worthless. They will also use 'fraud recovery fraud', where a victim of a previous fraud is re-contacted and advised on ways to get some of their lost money back. This usually involves parting with further money i.e. the firm has gone into liquidation etc.

So far this year, Sussex Police and Surrey Police have seen 130 reports of investment fraud relating to vulnerable victims. Sadly, investment frauds often see high losses, the loss to those victims was £9.97 million with an average loss to victims being £110,800.

Most victims were male and aged over 75. However, anyone can fall victim to an investment fraud.

Whilst many investment fraud victims are contacted by telephone, a new emerging way of contact is on social media platforms such as Instagram, Facebook, and WhatsApp where often victims are persuaded to invest in cryptocurrency investments.

Case studies

One victim, a 64-year-old man from East Sussex sadly lost £35,000 to an investment fraud. The victim saw an advert on Facebook for investing into Bitcoin. The victim signed up to this opportunity and paid an initial fee of £250.

The victim was then called by a woman claiming to be his ‘trading assistant’ who will help the victim with his investment. The victim was told that his investment had already made money and was encouraged him to invest further funds by buying Bitcoin and sending it to the woman to handle. Believing his investment had risen in value, the victim asked to withdraw his funds. The victim was told that to do so he had to send further money. The victim in total sent £35,000 believing he was investing and making money.

In another case, a 78-year-old woman from East Surrey received a call from a supposed investment firm offering an opportunity to invest into a company and was persuaded to transfer £8000.

The victim was later told the company she invested in had risen in value and she had made £100,000 - to receive the funds made she would need to pay £18,000 in tax fees. The victim believing, she was due a large return, made this payment. The victim was again asked for further funds without receiving any return which made her grow suspicious. After seeking advice from a friend, it became clear the victim has been victim to an investment fraud.

Signs to look out for:

  • Are you being rushed into deciding on an investment?
  • Are you being offered unrealistic high returns on an investment?
  • Does the investment firm and offer have reviews? Can you search the company online to see what others say?
  • Some fraudsters will attempt to build a friendship with you to gain your trust.
  • Fraudsters may clone a genuine investment firm’s website to make themselves appear to be from a genuine company. View the website carefully and look out for mistakes. Search the company separately and contact them to check they are in contact.
  • Be wary of follow up calls offering to help recover any investment losses.
  • How to protect yourself:

  • Use the Financial Conduct Authority’s (FCA) register to check if the company is regulated by the FCA. If you deal with a firm (or individual) that isn’t regulated, you may not be covered by the Financial Ombudsman Service (FOS) if things go wrong and you lose your money.
  • Before making significant financial decisions, speak with trusted friends or family members, or seek professional independent advice.
  • Don’t be rushed into making an investment. Remember, legitimate organisations will never pressure you into investing on the spot.
  • If it sounds too good to be true, it probably is.
  • If you receive a cold call offering you an investment opportunity, hang up. Take Five and verify via a trusted method, not via numbers given to you in the call.
  • Remember, most cryptocurrencies are not regulated by the FCA which means they are not protected.
  • For further advice on investment fraud please visit the Take Five website.

    Phishing texts

    Fraudsters use lots of clever tricks to try and convince victims they are genuine and persuade victims to part with personal details or money. One trick to be aware of is ‘Smishing’.

    If you already have an existing SMS thread relating to a number how do scammers then insert fake texts onto the same thread?

    The fraudster will have their own phone number and will register for a ’Sender ID’, usually using a business, organisation or building societies name. This allows the fraudster to have this name appear as the Caller ID instead of their own phone number when texting or calling victims. This is a trick used to make their contact to a victim appear to be coming from a genuine business or organisation.

    If the victim already has a text thread from the genuine business, organisation or building society the fraudster’s fake text message will now appear on that same thread which was once completely genuine as the device cannot tell the difference.

    Anti-virus scam

    We have seen several reports of fake security emails and computer pop-ups targeting victims to persuade them to part with personal and banking details.

    In one case a 65-year-old woman from Sussex received a message on her laptop about anti-virus software, saying that her computer has been comprised and that they could help her make it safe. The fraudster then called the victim and convinced her to download remote access software onto her laptop.  The fraudsters then gained access to the device and started to download files to her laptop, including software that they claimed was anti-virus. The fraudsters tried to persuade the victim to pay £69.99 using her online banking while they had access to her laptop, claiming it was for the software. Thankfully the victim did not do so and recognised this as a scam.

    How to protect yourself:

  • Never allow anyone remote access to your computer or device.
  • Do not download software on the request of a caller.
  • If you are having issues with your computer or device, contact the retailer you purchased it from.
  • If you receive a call like this, hang up. Verify using a trusted method, not numbers or contact details given in the call.
  • A genuine service provider will never contact you ‘out-of-the-blue’ regarding issues with your device.
  • If you have spotted a suspicious email, forward it to the Suspicious Email Reporting Service at report@phishing.gov.uk

    Social media hacking

    We have received reports of fraudsters hacking social media profiles and then requesting payment to unlock the account.

    One victim, a 36-year-old woman from East Sussex, reported that her Instagram account had been hacked. The victim received a ‘follow’ request from a man which she accepted, and the pair began chatting. The man later sent the victim a link claiming it was for jewellery. The victim clicked this link and was then locked out of her Instagram account, soon realising that her email address and password on Instagram had been changed and the fraudster had taken over her account.

    The victim then received demands from the fraudster claiming that if she made payment to him, she would get her account back. The fraudster asked for iTunes vouchers or Bitcoin to be sent or he would continue to use and control her Instagram account.

    Thankfully, the victim did not part with any money and reported the incident to both Instagram and the police.

    How to protect yourself:

  • Have strong passwords; do not use personal words to you, ensure you have separate passwords and never share passwords with anyone.
  • Do not click on links or attachments unless you can verify where they came from. Call the sender to check its genuine. If in doubt, keep them out.
  • Do not share everything on social media; be careful who can see what you share online. Ensure your privacy settings on social media are set to a high level.
  • Always report suspicious activity to the social media platform.
  • Messages from friends and family

    We have seen several reports of text and WhatsApp messages being sent to victims claiming to be from a family member or friend. The message claims that the supposed family member or friend is contacting them from a new number as their phone has broken. The fraudster will then claim to be in urgent need of money and ask the victim to send funds to help. Sadly, many victims have lost money to this scam believing they are helping a family member or friend in need.

    How to protect yourself:

  • Always contact the family member or friend on a genuine contact method you have recorded for them to check they are in need.
  • Is the family member or friend asking you to pay into a new bank account? Do the account details match up with a bank account you have paid into before?
  • If you are unsure on a transaction made, please contact your bank immediately.
  • Have you been a victim of fraud?

    If you or someone you know is vulnerable and has been a victim of fraud please report online.

    Report fraud or attempted fraud on the Action Fraud website or call 0300 123 2040.

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    Message Sent By
    Alex White
    (Police, Communications Officer, Corporate Communications)

    Neighbourhood Alert Cyber Essentials