Fraudsters are increasingly targeting the over 55s with investment scams, according to a consumer watchdog.
A survey by the Financial Conduct Authority (FCA) suggests that one in five aged 55 to 74 years old believe a fraudster has targeted them, rising to one in three of over 75s.
The average loss suffered by a scam victim was £32,000.
The FCA wants to tackle the rising tide of frauds against older, wealthy savers who can access their pension cash under pension freedoms.
The watchdog was dismayed to find that one in eight over 55s fail to research an investment opportunity before handing over their cash.
The number rises to one in four over 75s.
Older investors at risk
Older investors revealed the most popular check before investing was to look at a web site (41%).
Only 27% took professional, independent financial advice, which the FCA is the most effective way of combatting a scam.
Almost half (47%) of investors agreed they put more effort into checking out builders coming to their home even though the £26,000 average cost of improvements was less than the average amount at risk to an investment scammer.
“Making a significant financial investment is an important decision – be prudent, do your homework and be especially on guard if contacted out of the blue by someone you don’t know.,” said FCA director of enforcement Mark Steward.
How to detect a scam
“Fraudsters are targeting our growing over 55 population because they are more likely to have money to invest. They may pressure you to make a quick decision or try to make you feel stupid for not taking up their bogus offers.
“No investment decision should be rushed. Be sceptical. Be suspicious. Ask questions and get answers you can verify. Remember, if you receive an unsolicited call about an investment opportunity that sounds too good to be true then it probably is. The best thing to do is hang up.”
Steward also explained the least due diligence to carry out before making an investment:
- Don’t deal with cold callers who get in touch by phone, text or email
- Check with the FCA to see if the firm promoting the investment is on a blacklist
- Speak to an impartial adviser before going ahead with an investment
He also revealed that the FCA dealt with 2,142 calls reporting scams or bogus advice firms between June and November, while thousands of visitors checked out the watchdog’s ScamSmart web site.