Investment scams were up 23% in 2023, accounting for a third of all money Barclays customers lost, according to data released by the banking group.
This coincides with data from the Financial Conduct Authority’s customer helpline that shows there has been a sharp spike in investment scam-related calls, up 193% in the last five years.
Of all scam types, investment scams made up the greatest share of total claim values, with the volume of investment scams increasing by nearly a third (29%).
Investment scam victims are claiming an average of £14,313, over five times more than the overall average scam claim.
Millennials and men are particularly susceptible to the scams, according to the data: men’s average investment scam claim increases to £16,306, while claims by young people aged 21-40 account for 48% of all investment scams.
Whilst scammers target potential victims in a number of ways, adverts purporting to offer high-return investment opportunities are a common tactic – which a quarter (23%) of young people saying that they’ve spotted what they believe to be an investment scam advertised on social media.
Almost one in five young people (17%) have been contacted on social media by an individual offering an investment opportunity and one in every ten people in the UK (11%) know someone who has fallen victim to an investment scam.
Scammers often trick their victims by convincing them at first to only invest a small amount. This then seems to return high rewards, which the scammers pay out from other victim’s money.
This tactic often convinces the victim that the investment is legitimate and in-turn leads to larger amounts being lost to the scammers, often over a long period of time.
Investors, however, have saved £2 million by identifying when purported investment opportunities were too good to be true – either by spotting, spelling, grammatical or formatting mistakes, or by realising that requests for personal information were suspicious.
However, with advancements in AI technology, the ability to produce convincing scam material is more accessible than ever
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“It’s worrying to see such a rise in investment scams – with victims often heartlessly scammed out of large sums of money that they have been saving for their future,” Stephanie Mac Sweeny, head of fraud strategy at Barclays, said.
“The banking industry works hard to educate, identify and intercept scams, but the only way to drive real change is to target these scams at their source.
“With the majority of investment scams now taking place on their platforms, social media firms must take responsibility, act on their promises and deliver a robust verification system to protect innocent people from falling prey to fraudulent investment adverts.”
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