Victims of investment fraud lost over £197m in 2018 as scammers use increasingly “sophisticated tactics” to persuade people to invest their savings, according to new figures from Action Fraud.

The Financial Conduct Authority (FCA) issued a warning to potential victims of investment scams today, 6 February, after it emerged that the average victim lost £29,000 last year, as fraudsters move away from cold calling and towards online techniques.

In August, The Pensions Regulator and the FCA joined forces to launch a campaign, ScamSmart, urging people to be aware of scammers targeting their pension savings, after they revealed an average of £91,000 was lost per victim in 2017.

The number of people visiting the ScamSmart website increased from 31,000 in the 55 days prior to the launch of the campaign to 173,000 in the 55 days after, according to FCA figures.

Of those who checked the FCA Warning List, 54 per cent had been contacted via online sources in 2018, up from 45 per cent the previous year.

FCA executive director of enforcement and market oversight, Mark Steward, said: “Investment scams are becoming more and more sophisticated and fraudsters are using fake credentials to make themselves look legitimate.

“The FCA is working harder than ever to help protect the public against this threat. Last year we published over 360 warnings about potentially fraudulent firms. And we want to spread the message so we can all better protect ourselves from investment scams.”

However, the FCA revealed in its meeting with the Work and Pensions Select Committee today that it had only around 10 staff working to tackle investment scams out of a total workforce of around 3,700.

In January, pensions cold-calling became illegal and companies caught nuisance calls could face enforcement actions and fines of up to £500,000.

Aegon head of pensions, Kate Smith, said: “Legislation to prevent pension cold calling will help to some extent, but investors shouldn’t be lulled into thinking they’re home and dry.

"To fully fight fraud a considerable amount of work needs to be carried out to inform people and the over-55s in particular, that cold calling is illegal and they need to continue to be on their guard. A government led campaign to keep this issue in the limelight would help to combat the scourge of fraud.”

According to Action Fraud, investments in shares and bonds, forex and cryptocurrencies by unauthorised firms accounted for 85 per cent of suspected investment scams in 2018.

The FCA warned that people must be extra vigilant during Q1, peak investment season.

Six warning signs delivered by the FCA include unexpected contact, time pressure, social proof, unrealistic returns, false authority and flattery.

Last month, the Insolvency Service said it has applied to wind-up 24 companies, connected to 3,750 scam victims, since 2015.

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