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People falling victim to investment scams are losing around £14,000 on average, data from Barclays indicates.
The bank said victims of this type of fraud lost £14,313 on average last year, with younger adults aged 21 to 40 accounting for nearly half (48%) of reported investment scams.
A common trick is to encourage people to invest a small amount at the start, with scammers paying out from other victims’ money.
This often convinces the victim that the investment is legitimate and in turn leads to larger amounts being lost, Barclays said.
Here are Barclays’ tips to avoid investment scams:
1. Social media thrives on human impulse and scammers often create a false sense of urgency. Pause and reflect before committing to any investments.
2. If an offer seems too good to be true, it probably is. Speak to a qualified financial adviser or family member to get a second opinion. Be wary of taking investment recommendations from a friend without doing your own research.
3. Check to see if the person or organisation contacting you is Financial Conduct Authority-authorised via the financial services register or the FCA’s ScamSmart investment checker.